ABSTRACT
This chapter reviews the existing research on game theory and Project Management. It presents two solution concepts for cooperative games, the Shapley value and the Core. The chapter illustrates allocation of rewards resulting from cooperative behaviour among the firms carrying out a project in order to expedite it; allocation of costs among activities that have caused delays. It describes float allocation among non-critical activities in a project. The concept of float is central to the analysis of activity networks in Project Management. Game theory is divided into two approaches, the axiomatic approach and the strategic approach. Under the latter approach game theorists treat economic theory as a part of game theory. Application of Game theory in Project Management is the beginning of its practical applications. In game theory individuals or groups become players when their respective decisions, coupled with the decisions made by other players, produce an outcome.
