Game theory finding practical answers for the business world

As someone who somehow managed to score zero in a maths exam as a 12-year-old in middle school, Professor Leng Ming-ming has certainly come a long way.

Now Chair Professor of Computing and Decision Sciences at Lingnan University, he views that early setback as a definite turning point. It actually inspired a fascination for the subject, which ultimately led to a distinguished career in academia and notable research on game theory, operations and supply chain management, and the interface between operations and other disciplines.

“Taking my father’s advice, I began to read the textbook by myself before classes and, surprisingly, found that I could understand everything very easily,” he says. “I quickly developed a very strong interest and, since that time, have been addicted to mathematical problems and logical thinking. Even now, the best way for me to relax at weekends is by solving one or two problems from past Maths Olympiads.”

Clear proof of this new passion was evident when he took China’s National College Entrance Examination in the late 1980s. Completing the paper in less than half the allotted two hours, Leng also achieved full marks, setting him on the road to a subsequent PhD in management sciences at Canada’s McMaster University, where from 2001 he focused on dynamic programming, stochastic processes and, in particular, game theory and its applications.

“Game theory contributes to the analysis of situations involving conflict and cooperation, with two or more decision makers,” says Leng, who is also Dean of the Faculty of Business. “Since the early 1940s, it has been widely applied to many areas including business studies. And, in the 21st century, game-theoretic analysis of supply chain management became one of the hottest research issues, mainly because any supply chain consists of two or more firms at different echelons.”

The overall subject came to much wider attention thanks to the Oscar-recognised film A Beautiful Mind about Nobel prize-winning game theory scientist Professor John Nash. The book which inspired the film was on Leng’s PhD reading list and, in due course, caused him to look more closely at computational approaches for solution concepts in cooperative game theory.

“The rapid development of digital technology and social media has also brought about many changes in organisational and operational models,” he says. “Relationship management has become a key to supply chain success, so we need to understand how firms interact in an efficient manner to achieve win-win outcomes. Game theory has been a primary methodology in this analysis and has led to a significant number of managerial insights to help improve operations.”

Since becoming a full-time Lingnan faculty member in 2005, Leng has developed and taught business courses at both undergraduate and postgraduate levels. The themes encompass project management, simulation, e-business models and start-ups, drawing on his five-year experience of working in industry in Beijing before his PhD, as well his widely acknowledged areas of specialisation.

In parallel, his research has consistently sought answers to practical problems. More recently, it has centred on ways to entice firms to cooperate in a fair manner. One example, originally motivated by reference to what Wal-Mart does, was to see how to incentivise the use of blockchain technology in an entire food supply chain. Another was to explore how, using cooperative game theory, two or more firms could share the high cost of 5G infrastructure as fairly as possible.

Where feasible, Leng prefers to collaborate on projects and papers, believing that teamwork, which brings together diverse expertise and complementary skills, ensures higher-quality research.

“Honestly speaking, most of my projects are challenging; there is no ‘free lunch’ in the field of academia,” he says, noting too the importance of keeping a close eye on the international business news to spot evolving trends and potential case studies. “For each paper, there are a number of revisions and reviews, and the cycle time from initial submission to a journal to final acceptance averages 1.5 years.”

Indeed, he still remembers how the referee for one publication in IIE Transactions back in 2013 asked for complicated computations from limited data and the consideration of many decision variables and constraints.

“We tried to develop some helpful algorithms, which finally made our computations feasible. It was a very tough experience, but also of great help to my future research activities.”

Looking ahead, he wants any upcoming projects to contribute in some way to improving people’s daily life or industry operations.

“I may also consider some knowledge transfer (KT) projects that are not academic issues, but allow academic knowledge to be applied to real-world problems, usually with financial support from firms and practitioners.”