In a repeated game, like Personalized Medicine ,each player has the opportunity to establish a reputation for cooperation

 

Personalized Medicine (PM) is not about having personal prescriptions delivered at home – PM is about a drug that suits you because you have genetic profile A; your neighbor has genetic profile B; what serves you will not serve him.

PM is the result of the mapping of the entire human genome and the possibility of avoiding illness by prevention. We now talk WELLNESS instead of ILLNESS. That is personalized medicine!

It is not about a new drug – it is about all the structures that will make that new drug work.

PM will involve cooperation between many players or stakeholders as you wish – it is no longer just about pharma – it is about pharma and all the other necessary services.

It is about a game of cooperation, coordination, communication, between all the stakeholders’, including the patient, insurance companies, remote control technology, etc.

Mixed strategies mean more than one Nash equilibrium

It is about the change that PM means.

PM is a disruptive innovation that will require the development of new business models. Just as outsourcing and M&A were disruptive changes to pharma companies.

The Bask country and “Tecnalia” is a PM pilot project – Half the Bask country is now “living PM.”

NASH EQUILIBRIUM

Nash equilibrium is a fundamental concept in the theory of games and the most widely used method of predicting the outcome of a strategic interaction in the social sciences. A game (in strategic or normal form) consists of the following three elements: a set of players, a set of actions (or strategies) available to each player, and a payoff (or utility) function for each player. Strategic interaction occurs in many aspects of life meaning situations in which company A strategy depends on what strategy company B will have.

In a repeated game, each player has the opportunity to establish a reputation for cooperation, and thereby encourage other players to do the same. The factor that might potentially generate cooperation in the current period is that cooperation now will help generate cooperation in the future; but if there is no future, this mechanism is inoperative.

Nash equilibrium is applied to business strategy – please read Harvard’s several papers on the subject.