Gregor Berz, Valentin Flietner, Felix Opelt, Corinna Sporer: What Game Theory tells us about Today’s Automotive Mega Trends

Many countries, including Germany, are beginning to switch from traditional combustion engines to alternative, more environmentally friendly driving concepts. This change represents an existential threat to the German automobile industry, which ironically is a key player in realizing this new, green future that could threaten its own survival. Additionally, there is the collective dream of autonomous vehicles, which many believe to be the future of transportation, as well as the trend of automobile manufacturers becoming “mobility providers” instead.

Although these three trends may appear to be completely unrelated, we will discover that the trajectories of these trends are inextricably linked through a game played between OEMs, consumers and the environmental movement. A key insight is that the Nash equilibrium found by Berz (2020) depends on the perceived likelihood of success of autonomous vehicles, and players can benefit from influencing each other’s probability estimates.

Part of the Munich Social Science Review, New Series, Volume 8 (2024)

The entire volume can be purchased online at this link.