Video: how to buy a car using game theory

This video is about a car buying technique from Professor Bruce Bueno de Mesquita. I previously enjoyed one of his TED talks about predicting political events.

The video is short and offers great practical advice for buying a car in America. Give it a watch:

Video: how to buy a car using game theory

And to pre-empt someone saying the video “is not really about game theory,” I respond that the following game theory concepts are used in the car-buying strategy:

–changing the game: you don’t go to the dealership, you call them

–auction theory: you are turning the negotiation process into an auction amongst dealerships

–credible threats: you walk out if they mislead you

Game theory can be a wonderful way of thinking about problems.