Game Theory : The essence of Enterprise Architecture is about establishing a “Dominant Strategy”

The essence of Enterprise Architecture is about establishing a “Dominant Strategy”, that best achieves ‘economy of scale’. The economy of scale will apply to each of the architecture design decision selected. The set of design decisions that leads the architecture planning from strategy to tactical and from tactical to execution needs to converge to a dominant strategy engaging all the stake holders led by a cohesive mechanism of Governance.

Note: EA is about discussing the largest picture of the enterprise. Hence, any decision made must ensure that it lends sufficiently across the enterprise while increasing its “reuse”. This means ‘economy of scale’. All decisions, including the technical design decisions must yield a better ‘return on investment’ from optimized ‘performance vs cost’ perspective.

The main goal of the Governance, is to lead the dialogue that an enterprise riddled with complexities is engaged in,  towards a -“Dominant Strategy”. In many ways the array of events that Governance trigers, while working towards converging the decisions to a cohesive set of results, is similar to the behavioral probabilities  studied in Game Theory.

When a system is riddled with constraints, especially when  ’money’ as  a resource is scarce, then it dominates the decisions needed to achieve the strategy. A system’s behavior  is governed by both micro and macro considerations. There is a threshold until which the system is probabilistically stable and is not affected by the micro behavior. After a certain threshold the micro behavior is unable to sustain the desired macro outcomes.

When Scarcity arises – Economics is Hot

Dominant Strategy

A strategy is dominant if, regardless of what any other players do, the strategy earns a player a larger payoff than any other. Hence, a strategy is dominant if it is always better than any other strategy, for any profile of other players’ actions. Depending on whether “better” is defined with weak or strict inequalities, the strategy is termed strictly dominant or weakly dominant. If one strategy is dominant, than all others are dominated. For example, in the prisoner’s dilemma, each player has a dominant strategy.

Introduction to Game Theory