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ARTÍCULO
TITULO

GAME THEORY: MINIMISING THE COST OF CAPITAL VS. MAXIMISING THE RETURN OF INVESTORS

Mihaela Brindusa Tudose    

Resumen

The application of game theory to financial transactions focuses on two categories of stakeholders: users of financing (firms) and providers of financing (investors). The core of game theory consists in the strategy that a partner is able to build starting from the possible decisions of the other partner (each party having opposing interests). In fact, we deal here with a cooperative game in which both opponents seek to maximise their own chances of winning. The article aims to highlight the manner in which mathematical game theory is transposed in the field of corporate finance by balancing the firm?s objectives (maximising market value by minimising the cost of raising capital) and the investors? objectives (maximising returns on investments). The intended novelty of this paper lies in developing a model for optimising a firm?s financial structure and assessing it in terms of investors? interests.

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