Game theoretic aspect of production process transfer functions

Abstract

In a single-input-single-output production process the variability of the input and output from the process makes the determination of the exact nature of the relationship between the input and output quite complex and difficult. It is therefore necessary to seek an analytical tool to clarify the
nature of this relationship. The proposed analytical model is the transfer function. Determination of the production process transfer function will have potential applications in game theory, maintenance and quality control. This work examined the potential application of single-inputsingle-
output production process transfer function modelling to game theory and mechanism design. Models relating transfer functions to Bayesian games and mechanism design were developed. On the final analysis, it was shown that relating transfer function to Bayesian games and mechanism design would lead to optimal bids, optimal manufacturing and purchasing
strategies, and design of efficient mechanism by social choice planners.

Keywords: Transfer function, Game theory, mechanism design, production process