Game Theory Application in Determining the Optimal Marketing Strategy in Insurance Companies

Abstract

Game theory is a mathematical model used in situations of conflict or competition between various interests that face each other as competitors. The goal is to find the optimal strategy for each player. In game theory, there are two types of optimal strategies, namely pure strategy and mixed strategic. The author uses a linear program to obtain an optimal mixed strategy and uses the help of QM 4.0 software to solve linear program problems. In this study, the authors apply game theory in the competition of insurance companies, namely Prudential Insurance and Sinar Mas Insurance. This study uses primary data, in other words this research generates preferences and perceptions for each insurance company in determining its marketing strategy.