The game theory of everyday life

Remember the days when you were free and could travel in the Delhi metro , you find a vacant seat in the metro. However the seat is  a "reserved" seat ( for those of you who don't know , a reserved seat is a seat reserved for ladies and senior citizens ). Now , you need to take the decision of taking the seat or not. Various thoughts hover your mind - "I may have to free the seat anytime soon " , "it has been a tiring day , let it be " and so on. 

Game theory somewhat deals with situations like these , rather more complex ones. It is actually a "strategic art of decision making." Game theory can be applied to simple problems like taking up a  seat in the delhi metro , playing a game of rock paper scissors and to complex problems like deciding the foreign trade policy , world predictions and even the decisions of confessing your feelings to someone you like ;)

Infact , Bruce Bueno de Mesquita ( an academic at New York University ) made several predictions like the Egypt President falling from power in May 2010 to Pervez Musharraf leaving the office. He confessed that all this has been possible because of a "game" he designed keeping game theory as the basis of it. Some even say that game theory was used to find Osama Bin Laden. However , I am not really sure about how that worked.


Game theory does not yield the best possible outcome , just the MOST LOGICAL one.

Consider this situation- 


Here the best strategy ( dominant strategy ) for both the parties is TO STAY SILENT.
However , this strategy is not the SOCIAL OPTIMAL. 

Game theory aims to give us a better perspective of things thus helps us form a better strategy like the grid of the rock paper scissors game here -



To know more about the game theory , check out these YouTube links and I might do a second post about the same. To get updates about the latest posts you can subscribe to the blog -





Also , my blog crossed 3k views , thank you everyone for supporting this blog! 

Sources -   https://www.google.com/amp/s/amp.economist.com/technology-quarterly/2011/09/03/game-theory-in-practice

Candice Chung's research paper " Why smart women go for jerks "

My economics class :)







Comments

  1. SidApril 15, 2020 at 9:44 PM

    Nicely written! And although I've been talking about proposal or no proposal in the prisoners' dilemma, I didn't put that in the 2X2 matrix. I'll use that next time prolly :D
    And yes, I am glad that you found the paper - Why smart women go for jerks :P

    ReplyDelete

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