How entrepreneurs can use game theory to build winning businesses

In MENA, where regulation lags behind innovation, and competition often plays out in WhatsApp groups before boardrooms, entrepreneurs are building businesses while playing games. And the smartest among them are using game theory, whether they know it or not.

‘Game theory’, according to the Stanford Encyclopedia of Philosophy, is the formal study of strategic interaction, where the outcome for each participant depends on their own choices, as well as on the choices of others.  

In a region where the stakes are high, thinking in moves and countermoves can turn a good idea into a dominant force.

Don’t be the best, but the most difficult to replace
Let’s start with a truth most startup founders in MENA won’t say out loud. Many are playing a zero-sum game, which is a scenario where the total value remains constant, and no wealth is created nor lost. In a two-player zero-sum game, one player’s gain is exactly equal to the other’s loss, meaning the players have completely opposing interests. Take Careem, for instance. They didn’t out-innovate Uber but they out-strategised it. By embedding themselves in local ecosystems (drivers who spoke Arabic, payment systems that worked without credit cards), they rewrote the game Uber was playing. They did not compete with the global player, but rather imposed a new set of rules to the market. That’s game theory in action where you design a game you are more likely to win.

Signal strength, even if you’re weak
In game theory, signaling is a strategy used to convey strength without necessarily having it. Think of a startup launching with a splashy press release about a ‘strategic partnership’ or ‘expansion plans’, even if the team is still five people working from a WeWork in Jeddah. Done smartly, this creates asymmetric perception, a concept where rivals overestimate your strength and back off, or investors believe they’re late to the party. In Riyadh, for instance, a Saudi health tech startup recently claimed a pipeline of hospital deals before final signatures. Result? Their competitors delayed their own pitches, unsure whether to counter or pivot. That window of hesitation allowed the startup to close deals first and define the terms of engagement.

Use the ‘prisoner's dilemma’ to break old alliances
Many MENA industries, such as real estate, logistics, and construction, are cartel-like, where alliances are built on fragile trust. Use that to your advantage. Let’s say you’re a new B2B marketplace entering the UAE construction supply space. Two incumbent players dominate, and they’re informally cooperating to set prices. Game theory’s classic prisoner’s dilemma tells us that with the right nudge, say, offering one of them exclusive access or better margins, you can induce betrayal. This invites you to divide incumbents instead of just competing with them.

Think like a coalition builder

Regulators, incumbents, investors, and customers in our region often overlap in messy ways. Therefore, avoid building mere companies and focus on building coalitions. In Egypt, one logistics startup didn’t waste time chasing every SME. Instead, they built a coalition with a large FMCG distributor, a small bank offering working capital, and the Ministry of Transport. What looked like a logistics play became a mini-ecosystem, locking in partners, blocking competitors, and generating regulatory goodwill. This is a cooperative game, where shared interest creates protective moats. In the MENA context, who you’re with often matters more than what you’re doing. 

Turn every competitor into a future partner
Game theory teaches us that games are rarely one-shot. In the region’s entrepreneurial scene, which is small, fluid, and relationship-driven, today’s competitor is tomorrow’s acquirer, co-founder, or investor. Therefore, try building optionality instead of burning bridges. When a Moroccan edtech startup faced aggressive competition from a UAE-funded rival, they didn’t counter with price wars. Instead, they offered to co-brand in certain Francophone African markets. That deal expanded its reach and delayed a full-on competitive war, bought time, and opened conversations that eventually led to a joint venture.

Design exit-blocking strategies
Want to play long-term? Use game theory to block exits, not just raise rounds. A Jordanian SaaS company embedded itself deeply into client workflows with custom APIs and regional compliance features. Result? Clients couldn’t leave, even if a better tool came along. Switching costs were high, but so was the trust built into local nuance. This is called classic strategic entrenchment, where you build so much value into the relationship that leaving you is irrational. Think less ‘retention marketing’ and more ‘economic lock-in’.

Final move
American author and business leadership speaker Simon Sinek calls it the ‘infinite game’, or playing to keep playing. The real winners are the ones who make themselves indispensable over time. This confirms that game theory is about playing with vision, designing feedback loops, and sometimes, reshaping entire sectors. 

So the next time you build a business in MENA, ask yourself what game am I playing? Who’s playing with me? And how do I make sure I control the next move? Because in this region, more than most, strategy is destiny, and the best entrepreneurs are the real players.

About the Author:

Rodrigue Nacouzi, Founder & CEO, Transcorp International.

Rodrigue Nacouzi is an award-winning entrepreneur helping shape the future of logistics, leading smart cold-chain logistics solutions across 120 in the UAE, KSA and Qatar. Under hisleadership, Transcorp operates a fleet of more than 1,000 vehicles, handling 1 million deliveries per month with a 98.9% success rate.

Rodrigue emphasizes innovation, sustainability, and inclusivity in Transcorp's operations. The company integrates AI and machine learning for route optimization and maintains a green fleet. Transcorp is ISO 22000 and HACCP certified, ensuring high standards in food safety and quality.