Game theory > Life

Saving money on a plumber – game theory in practice
The other day I called a new plumber for a non-urgent job. He came to my house, and after inspecting said, "It'll be $150 and I can do it today. What do you want to do?" I had no idea how much the job should cost, so I had to make ...

Winning a rigged game – a fun riddle
Someone sent me a fun riddle that I wanted to share: In a distant kingdom lived a king and his beautiful daughter. The daughter was in love with a peasant which the king strongly objects. However, he decided to show his fairness. He gave the peasant a chance. He said he ...

Salem witches – a math puzzle
[update 7-1]: I'm on vacation...will be back with posts the week of the 12th! I came across a fun math puzzle that's relates to the game theory of guessing. The puzzle was posted by James Grime, a mathematician who has posted some nice videos under the name singingbanana. Let's get right into it. The puzzle I've transcribed the puzzle ...

Game theory and the Golden Rule
There's a nice game theory cartoon over at Saturday Morning Breakfast Cereal The cartoon is very well done, though I must address a common misunderstanding. The Golden Rule is not opposed but rather entirely compatible with game theory. In fact, the golden rule emerges naturally as a strong strategy in the repeated ...

Why I would rather watch the end of a close soccer match than a close basketball game
Close soccer matches are usually interesting. Teams are pressing on offense or locking down on defense. There's a lot of chaos and intense energy. This is less so in close basketball games. Usually teams are deliberate on offense and defense, stalling with fouls and timeouts. The pace is maddeningly sluggish. In ...

The weirdest soccer match and game theory
Yesterday I wrote about a weird World Cup game where nobody tried to score. There is amazingly an even weirder game on record. The infamous game is about a team advancing in a tournament by scoring an own goal. In the 1994 Shell Caribbean Cup, Barbados needed two clear goals to advance ...

Game theory in practice: scheduling the FIFA World Cup group stage
The 2010 World Cup is on and occupying more of my time than I'd like to admit. The first part is my favorite segment of the tournament. There are always quality matches, and every game affects a teams chance to advance. In case you're unfamiliar, the first part is known as the ...

The game theory of online sarcasm and jokes
In college I would occasionally share edgy jokes to the dorm email list. One day, I asked if anyone minded them. I got a reply like this: "The jokes are so offensive. Please stop hurting my weak, delicate feelings." At first I brushed it off. I knew this person and he hated ...

The St. Petersburg Paradox: a flimsy critique of expectation theory by people who don’t know math or economics
As someone who uses math and economics for a living, I come across many opposing arguments. There are always people who wish to prove to me economics is fundamentally flawed. My first encounter of this type came after my freshman year of study at Stanford. I was sharing some economics ideas ...

Applying game theory to relationships, MBA, parenting – 4 videos by Barry Nalebuff
Barry Nalebuff is co-author of three of favorite game theory books Thinking Strategically, The Art of Strategy and Co-opetition. So I was thrilled to see there are four small talks from him, courtesy of BigThink In no particular order, here are the videos: Enjoy! VIDEO 1: applying game theory to human interaction

Wild card poker paradox
Wild card poker is a variation of poker that implements the use of at least one "wild card." A wild card is a designated card that a player can assign any value and suit. A wild card livens the action by making stronger hands easier to complete. This post is about ...

Seating strategy: how many ways can a group sit around a table?
A table seat choice can be the difference between a boring, wasted night and a fun, profitable one. I can recall two examples where seat choice made a big difference. The first was a student-faculty dinner at Stanford where I had invited a math professor. The etiquette was to accompany a ...

Why target-based bonuses encourage cheating, and how to motivate instead
Performance bonuses are often said to be a necessary evil. They are necessary to motivate and reward outstanding performance. But they can be evil as they can encourage cheating. Warren Buffett once wrote: "Managers that always promise to 'make the numbers' will at some point be tempted to make up the ...

The Price is Right Lucky Seven game – a good example of dominated strategies
The game show The Price is Right has so many fun games to analyze. One of my favorites is called "Lucky Seven" or "Lucky $even." This is a guessing game and the prize is a brand new car. Here is how the game works. You start out with seven one-dollar bills. You ...

Bill Clinton talks game theory
I recently finished the book Nonzero by Robert Wright. The book was very informative and suggests cultural evolution has an arrow towards larger positive sum interactions. It turns out the book is a favorite of former President Bill Clinton. The book's website led me to a talk by Clinton where he ...

Why decision by committee often fails
Facing a tough choice, my boss set up a committee to decide. The committee spent days arguing and eventually came up with a horrendous recommendation. Sound familiar to you? image credit: dandechiaro I've wondered why committees often fail and make terrible decisions. Recently I came across a mathematical illustration that helps explain ...

A funny auction commercial
I came across a commercial featuring a rather unusual auction. I enjoyed this more than I'd like to admit... Before you watch it, a fair warning. This video is NOT for the faint of heart. If you don't like edgy comedy, just skip this post and don't watch the video. Here it ...

Game theory videos by Tim Harford
I recently finished Tim Harford's book The Logic of Life which is an entertaining economics read. (My favorite part is the discussion about Giffen goods). I was pleased to discover a couple of videos used to promote the book that discussed game theory. The videos are cute and brief explanations of ...

Selling an extra ticket – a math bargaining puzzle
I came across a fun puzzle at a brain teaser forum BrainDen.com. Here is the problem: Sean wants to attend a basketball game. Unfortunately, he could not get tickets before it was sold out, but he has located someone that has an extra ticket which he is willing to sell ...

Guess the number – a game theory puzzle
I came across a highly amusing puzzle in Impossible?: Surprising Solutions to Counterintuitive Conundrums. What distinguishes this brain teaser from other "guess my number" puzzles is the method of solution. The answer is not an arithmetic trick or a mathematical sleight of hand like in your age by restaurant math. The puzzle ...

How to catch a baseball during batting practice using game theory – Youtube video
I have never caught a baseball during batting practice. I got really, really close once in the Oakland Coliseum but I lost out to a competing fan. Perhaps my problem was strategy, or lack thereof. Longtime reader William Spaniel once caught four balls, and his trick was using game theory. William ...

How to fix a broken bet – a puzzle
The point of a normal game is to win. But sometimes rules are written poorly and a player finds it beneficial to throw the contest. The "winning by losing" strategy is a perverse incentive but it is not uncommon. Two examples come to mind. First, a while back I wrote about ...

NCAA March Madness: why entering more than one bracket is questionable
Before I get into the math, a brief intro for international readers who might not be familiar with this event. The NCAA men's college basketball tournament is a wild event that is often called March Madness. It features a tournament bracket of 64 teams competing in single-elimination games until a ...

How to find cheap gas using game theory
[Update 2-14-09] I'm on vacation; articles will resume in a week or two, or as soon as I recover :) I usually find cheap gas based on experience. In my vicinity, I am aware of gas stations that sell for good prices. A few pennies here or there does not bother ...

A mystery Sherlock Holmes couldn’t solve, but you can
Consider the picture below of bicycle tracks in the mud. Can you figure out which way the rider was going, to the left or to the right? This is not an easy puzzle. In fact, it was such a puzzle that once befuddled the great detective Sherlock Holmes. But the picture provides just ...

How to bet on sports and the Super Bowl using game theory
The 2010 Super Bowl matchup is set. The Indianapolis Colts will face the New Orleans Saints. Already there is much speculation about who is the favorite, which quarterback will perform, which defense or offense will show up, and how these dome teams will play in an outdoor stadium. In fact, none ...

Game theory in Mario Party
Nintendo's Mario Party is a series that is a video game equivalent of board games. Gameplay involves mini-games which might include chance elements like rolling a dice or tactical elements like positioning a character on the right square. These video games consequently include many strategic elements and useful examples of ...

How to avoid the winner’s curse using game theory
I've made a huge mistake--GOB and others from Arrested Development Strangely, in many auctions it is a huge mistake to win. Winning can either be unprofitable or less profitable than expected, kind of like a Pyrrhic victory. The tendency of the winner to overpay is more commonly known as the winner's ...

The bottle imp paradox
I can calculate the movement of the stars, but not the madness of men—Isaac Newton, after losing £20,000 in the South Sea Bubble in 1720 One of my first stock purchases was Lucent Technologies in the late 90s. It was an unusual buy. I only did casual research. And what little ...

The necktie paradox
In the spirit of the season, I thought it would be fun to discuss a Christmas related paradox. The necktie paradox begins as follows (source). Two men are given neckties by their wives as Christmas presents. Over drinks they start arguing about who has the cheaper necktie. They decide to make a ...

Game theory in Numb3rs: hide and seek
I occasionally enjoy watching the TV show Numb3rs. The show is about a team of FBI agents who solve crimes with the help of a fictional mathematics professor, Charlie Eppes. During a crime investigation, Charlie comes on the scene to analyze all of the numbers and look for patterns that ...

Charlie Brown and game theory
I grew up watching Charlie Brown and the many Peanuts holiday cartoon specials. At holiday time I am always reminded of the Great Pumpkin, Snoopy's antics, and the cheesy phone conversations. But most of all I am reminded of Charlie Brown and game theory. Most of you will recall the running ...

The ultimatum game played by children
I came across a cute video about game theory. The video is about an experiment where children are asked to share a pile of chocolate coins. The twist to is they had to follow the rules of the ultimatum game. Specifically, here is how the game worked. One child got to offer ...

Lying students and games of coordination
It's sad, but many students lie to teachers and get away with it. That's why I love to read about stories where teachers catch the students red-handed. It's even better when the teacher has a little fun with it. Here's one story I especially enjoyed: My dad heard this story on the ...

Game theory joke on telling the truth
A long-time Mind Your Decisions reader sent me the following joke about the strategy of a confession. It's a classic--enjoy! The joke "Bless me Father, for I have sinned. I have been with a loose girl". The priest asks, "Is that you, little Joey Pagano ?" "Yes, Father, it is." "And who was the girl ...

Why you can trust a woman with an MBA
My newlywed friend is applying for an MBA. She and I were discussing her application and general factors, like lost salary and tuition cost. But then the conversation shifted towards strategy. How would the MBA affect her employability in a game theory sense? We came up with a few ideas, and ...

How to improve health care using game theory: the Prisoner’s Dilemma
"So take these pills, get a blood report, and see me in a few weeks," said my doctor. I was somewhat taken aback. It was my first physical as an adult. I was healthy overall, but I was being advised to take a prescription drug as a precaution...for the rest ...

Pascal’s Wager inverted: all atheists go to heaven?
Pascal's Wager is one of the most famous arguments for belief in God. Pascal's Wager does not offer proof or evidence for God. Instead, it is an exercise in probability that suggests belief in God is a better than non-belief. But it turns out there are many flaws with Pascal's Wager. ...

How to negotiate a pay raise using game theory–Youtube video
Update: Several of you have pointed out I have blogged about this topic before! For a more advanced discussion, please read my article how to negotiate at your job using game theory. I came across an interesting video that relates game theory to salary negotiations. The video is "How to Negotiate a ...

The Russian roulette puzzle
Can probability theory save your life? Perhaps not in usual circumstances, but it sure would help if you found yourself playing a game of Russian roulette. Today's article covers a couple of variations on the Russian roulette puzzle, which is occasionally asked as an interview brain teaser. Puzzle 1: Single bullet I received ...

The flu and game theory
The current swine flu scare is a reminder that the flu is a fierce disease. New strains can develop quickly and disarm populations. One only has to remember the 1918-1919 Spanish flu which caused anywhere from 20 million to 40 million deaths. Combating the flu is no small feat. It requires ...

Game theory joke: should English be the national language?
This is a sensitive topic, and I'm not entirely sure where I stand. But there are a lot of strategic issues to it that are fun to discuss. For now, I'll just open the topic up. Recently Mind Your Decisions reader Tim sent me a joke that shed a new light ...

The omnivore’s next dilemma | Michael Pollan talk on TED.com
In game theory, perspective matters. Good strategy depends not only on your actions, but also on how opponents perceive and react to them. You must understand how other people think in order to analyze situations like bike accidents, assigning work in an office, or planning a bank robbery. This works ...

Is it better to play your strength or your weakness? Finding the right mix
Top ranked tennis player Rafael Nadal seems to win by surprising opponents with his unexpected left-handed spin..but perhaps even more surprising is that Nadal is naturally right-handed! It might be fair to say that Nadal's success stems not just from his bulging muscles, but also from his ability to surprise opponents. ...

Fair division and game theory in a Jif Peanut Butter commercial
I was recently pointed to a Jif Peanut Butter commercial that touches on game theory. It deals with a mom trying to resolve a dispute between her two kids and the last slice of bread. Here is the commercial on Youtube (my transcription of it follows): Link to Youtube video Jake: Mom it's ...

Why the secret to speedier highways might be closing some roads: the Braess paradox
During the holiday season, several roads in my town were temporarily closed due to flooding. I was naturally worried how the road closures would affect traffic. But in the end, my fears were unfounded. Not only was traffic mostly unaffected, I often found my travel times were reduced! This experience made ...

Game theory in the news–the financial crisis, Macs and viruses, the bus-wait formula, and more…
[Update: Welcome readers from Simoleon Sense] I'm on vacation through the end of the year so I'm mixing things up. I've been seeing a lot of good articles on the web about game theory and want to share them with you. Enjoy and happy holidays. (If you're looking for more to read, ...

A math problem that might help you win one million dollars
Louis-Charles just won $1 million dollars...for making a few sports picks. The details are the 31-year old package handler correctly made 25 picks in a row before anyone else in ESPN's Streak for the Cash game. The most important part of the game was that it emphasized streaks, also known as ...

Marriage Jokes and Game Theory
I'm on vacation so my regular article will resume next week. In the meantime, I thought it would be fun to share a few jokes somewhat related to marriage and strategy. Hope you enjoy them, and feel free to add your favorite jokes in the comment section. One way to play matchmaker Father: ...

Can a rational person believe in miracles?
Rationality and miracles are seemingly in conflict. Rationality is about reason and natural explanations. Miracles are about emotion and supernatural forces. Can the two be reconciled? My friend sent me a fascinating explanation from The Language of God, a book by Francis Collins, a leader of the Human Genome Project. Collins ...

Ducks know game theory?
Game theory sounds like something only intellectuals would use. After all, technical math is required for academic courses. And many introductory problems border on the bizarre, like learning how to solve a game of “hot or not.” Game theory is famously associated with the RAND institute, a think tank of ...

The Game Theory of Stacking Matchups in Your Favor
Baseball pitchers and competition San Diego pitcher Jake Peavy did not like being called soft. On August 13, 2008, one day before a scheduled start, Peavy was brooding about accusations that he was choosing to face weaker opponents. Radio hosts were critical that Peavy had missed facing elite pitchers like ...

Using Game Theory to Explain Why People Are Superficial
I'm on vacation this week, so I am mixing things up with a fun video I saw recently. The video title is "Using Game Theory to Explain Why People Are Superficial." The setting is a college lecture given by Dirk Mateer, Ph.D. Mateer sets up an incredibly entertaining lesson where students are ...

A Day in the Life of a Game Theorist: A Tribute to One Year of Game Theory Tuesdays
Today I take moment to celebrate the one-year anniversary of “Game Theory Tuesdays.” I can’t believe it’s been a year already and it has been quite the journey. The column started as a mission to show how our daily lives could be improved with math and strategy. I was warned ...

The Game of Free Food: Why We Should Just Say No
photo by jbcurio How do you shop for food? Whether you realize it or not, every time you enter the store you are engaged in a game with food companies. You want to get the best deals. They want to make the most profit. The game is about dividing the surplus ...

Heart Disease and Used Cars
Why are so many people taking drugs for cholesterol? I pondered this question after reading about a new study on Vytorin: And the results left unanswered whether a drug that has been proved highly effective at reducing “bad” cholesterol—and has racked up $5 billion in sales in 2007 as a result—offers ...

10 Tips for Traveling Safely with Valuables
photo credit: GrooverFW A successful vacation depends as much on safety as it does on activities. The best travel plans can be sabotaged by pickpockets and dishonest hotel staff. Travel risk is inevitable because valuables like money and passports are needed when traveling overseas. So how can you protect yourself? This article ...

Why Patience Pays Off in Negotiations
photo credit: MShades via flickr A family caught my attention in a restaurant. A young kid was keeping his parents busy. He demanded an appetizer because the main course took too long. He then passed time playing video games on his cell phone. Soon he became bored again, so he took ...

How to Use Lies for Good, or Why Honesty Isn’t the Best Policy
image source: karindalziel via flickr Whoever said “honesty is the best policy” had to be lying. Lies have saved many messengers from being shot, and many couples from explosive arguments about body image (“Honey, do I look fat in this? Tell me the truth..."). There’s certainly much to be said about honesty ...

Scientists Use Game Theory to Determine the Importance of Individual Genes
Source: mknowles via flickr How can game theory possibly used in genetics? That’s what I thought when reading about new genetics research. I can’t say I have a grasp on the biology, but after some investigation, I now have a sense of how game theory comes in. I’ll summarize the news and then ...

Why You Might Want to Burn Bridges
Image source: peasap via flickr Forget the advice “never burn bridges.” There are many times that burning a bridge is not just beneficial, but absolutely necessary to accomplish a goal. "Never burn bridges" generally means don't leave a job or relationship on bad terms recklessly. While I agree with this particular ...

How Game Theory Solved a Religious Mystery
image source: marvinxsteadfast via flickr The Bankruptcy Problem A man owes debts of 100, 200, and 300, but dies with insufficient funds to pay everyone. How should his estate be divided? As we all know, there might not be one correct answer. Fair division is a concept that depends as much on logic as ...

Understanding the Stag Hunt Game: How Deer Hunting Explains Why People are Socially Late
It’s customary for people to arrive “socially late” to parties. In my social circles, this means arriving an hour after the stated invitation time. But customary does not mean correct. The practice of being socially late creates inefficiency only a government bureaucrat would be proud of. Arriving late means that people ...

How to Deal with Bad Service—Be Reasonably Unreasonable
Being reasonable doesn’t work “And how will you be paying today?” the pizza cashier asked me. I hesitated before I answered. I was being asked to pay full price, even though the store caused a 30 minute delay by burning my original order. I didn’t exactly have time to spare because ...

The Leaders Dilemma: How to Generate Cooperation at Home or Work
Motivating Joke One I found in my email: A couple in their nineties was having trouble remembering things so they went to their doctor for checkups. The doctor told them that they were both physically fine and advised them to write things down to help them remember. Later that evening while watching television, ...

The Hat Puzzle (A Consulting or Engineering Interview Brain Teaser)
The Hat Puzzle is one of my favorites. This is one of those brain teasers people might ask in an interview for a consulting or engineering job. Here is the problem, as worded by Sara Robinson (this is a good article to read): Three players enter a room and a red or ...

Manage Your Brand like Michael Jordan: Avoid Gossip Wars and Mutually Assured Destruction (MAD)
Growing up, I wanted to be like Michael Jordan. I think that was the dream of every kid I knew. We wanted the shoes. We drank Gatorade and ate McDonald’s. We stuck our tongues out on the court. Okay, so none of that really worked. But we weren’t wrong about wanting ...

Focal Points (or Schelling Points): How We Naturally Organize in Games of Coordination
Bike safety is a big topic. Wear a helmet. Follow traffic laws, like halting at stop signs. Don’t go too fast, and make sure your brakes work. This is all useful advice. It has been beat over my head since elementary school. Nonetheless, it didn’t help me from getting into bike ...

Winning a “Beauty Contest,” Or How My Game Theory Professor Gambled $250 Teaching a Lesson
Using game theory is like playing high stakes poker. You can predict the right moves, but you can still get burned by surprises. Game theorists often gamble more than just academic integrity and pride. In one very memorable lecture, my college professor staked $250 to teach a lesson about crowd ...

Game Theory scene from A Beautiful Mind
Two Introductory Announcements First, welcome to the Mind Your Decisions “week of skepticism.” All this week I will address misguided or crooked financial advice. The general theme is to be more careful about advice from people who sell you products or don’t consider strategic implications. Especially watch for well-intentioned but poorly ...

Splitting the bill at restaurants using game theory
[Update: Welcome Lifehacker readers] [Update 2: Welcome Slashdot readers] [Update 3: Welcome Cosmic Variance readers] “We’re going to split the bill,” said the organizer at my friend’s ninth grade birthday party. I didn’t think much of it until I ended up paying $40 for a $10 entrée. I felt cheated because I didn’t ...

The surprise quiz paradox
In high school, a teacher announced he would give a pop quiz during the next week. I just laughed. Tricks are for rabbits, silly teacher—you can’t surprise a rational student. To explain why, I’ll use the technique of “backwards induction,” which I introduced in the ultimatum post. So let’s start from the ...

How Can I Find True Love Using Game Theory?
Based on the top search results, you could: Learn from religious advice (love is what God says it is) Find your true love’s zodiac sign through a five question quiz (I will love a Taurus) Consider phone counseling (only to realize you are the real problem) Man, what a rip-off. How did these answers ...

The Tragedy of the Commons: Working During Holidays and Why Thanksgiving Almost Didn’t Happen
I will never work during the Christmas holidays again. Not after what happened last year. I was looking forward to the end of the year. A big deadline had passed, and my expected workload involved quantitative modeling, which was both manageable and enjoyable (this is nerdy stuff that I really like). ...

The Non-Mathematical Guide to Fixed Point Theorems and Proving Nash Equilibria Exist
Today, I present a brain teaser and some related trivia for you to talk about during your Thanksgiving celebration. And in the spirit of game theory, you can use the trivia to distract others as you grab more turkey. Problem: The journey of the monk. One morning at 6 am, a monk ...

Outcome Obsession: The Problem of Mechanism Design, as Demonstrated in Baseball
I discussed mechanism design recently and suggested how it can be applied to solve routine problems. I was thrilled to see that one reader intends to use mechanism design as a parenting tool. I hope the reader will design a good mechanism and succeed in its application. But it would ...

Using mechanism design to improve your finances…it’s as easy as splitting a Coke
I have to thank my fifth grade math teacher for unintentionally introducing me to game theory. The game theory is hidden in the following extra-credit problem that he asked us: My mother would often give a can of Coke to me and my two brothers and tell us to split it. ...

Why cooperation fails, and how to fix the problem using game theory
Some people criticize game theory (and to some extent economics as a discipline), calling it unrealistic and focusing on selfish behavior. Just check out this comment from a review of James Miller’s Game Theory at Work: You and I both know that in reality, things simply don't work that way between ...

Truels, or how game theory may explain survival of the weakest
In my recent game theory post, I wrote about how seemingly worse employees can get on better projects--if you didn't read it, please do as the answer may surprise you. This strategy really works, and as Joon and Rohomech pointed out in the comments, they implemented the strategy by incorporating ...

The strategy of limiting options: why less can be more
source: antanask via flickr Consider the following situation: John and Tim are both finishing projects at a consulting company and they are ready to be staffed on new projects. Their skill-sets and work ethics are similar, and both are considered team-players. Though they are comparable employees, their projects have been very ...

Game theory on eating at a party with an Indian host
***Small note: India has diverse geographic regions that differ greatly in customs and culture. I use the word “Indian” as a convenience. I am more accurately describing my experience with Americans of Indian heritage and my understanding of the regional culture in Mumbai (the state of Maharashtra).*** I enjoy going to ...

Understanding strictly dominated strategies, and 3 ways this can save you money
The trouble with the world is that the stupid are cocksure and the intelligent are full of doubt–Bertrand Russell A few months ago I was trying to catch a cab in San Francisco on a busy Saturday night. It is quite a game to pick the right spot. The ...