Game theory > Threats

Video: safety in numbers
Consider the following game. Two generals have 5 units each to deploy. Each person decides how many units to send to battle. The general who sends more troops will win, but it's a draw if they both send the same number. Each also has the option of "passing" which averts war and ...

How to beat the Prisoner’s Dilemma in the TV game show Golden Balls
Golden Balls is an amusing British game show. Especially interesting is the final contest which is a version of the Prisoner's Dilemma. If you're never seen the show, here is how it works. Each of two contestants independently chooses to split or steal the final prize. If both choose split, then ...

A game of Guts
Imagine a casino offers a new game called "Guts." A dealer wants to test the game, so he recruits two strangers (Alice and Bob) for an experiment. The game works as follows. Alice will secretly write an even integer on a piece of paper, and Bob will secretly write an odd ...

The supply game
(Apologies my site has been down today with technical issues. I am looking to get it resolved) Recently India caused a stir in global markets when it banned its cotton exports. The ban was a result of the unstable cotton global market, which has lead China to stockpile its cotton supply ...

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: Tom Haverford uses game theory in relationship advice
Tom Haverford has a lot of funny ideas on the show Parks and Recreation. In one scene, he dispenses relationship advice to his friend about how to handle his anger. It turns out Tom has something of a hidden agenda, as the following clip illustrates.

Attacking a target optimally: an example of war game theory from RAND 1957
The Prisoner's Dilemma. The doctrine of mutually assured destruction (MAD). These are just two of the game theory ideas that came out of the RAND corporation during the 1950s, forever associating game theory with the non-profit think tank. But there were other interesting game theory applications, too. I came across a ...

Video: monkey cooperation and fairness
While game theory was originally designed to explain human strategy, it turns out that the predictions are often applicable in animal behavior. Here is a fun video that shows an experiment about monkeys and cooperation.

The Colonel Blotto game
This is an interesting game I found in the book Introduction to game theory by Peter Morris that reminds me about the board game Risk. The Colonel Blotto problem is a zero-sum game about how to best position resources. While Colonel Blotto games are described in a military context, I will explain ...

Why your crazy girlfriend always gets what she wants: battle of the sexes game theory
You want to watch the football game. She wants to go out for a movie. Guess which one you end up doing. It's not exactly a scientific observation, but time and again, I have seen friends whipped by crazy girlfriends. (I would equally say there are a lot of crazy boyfriends, ...

A simple game that makes you think, “Wow, people can be really petty”
I came across a very interesting game theory example in the book The Survival Game. Let's you and I play this very simple game and analyze the best strategy.

Video: strategy in a TV game show
Game theory concepts can often help when trying to win prizes on a TV game show. I have previously written about a couple of the scenarios from the U.S. show The Price is Right: Optimal strategy in spinning the wheel Strategy for Pay the Rent Strictly dominated strategies in Lucky Seven I came across ...

Cannibal game theory – a cool math puzzle
I came across a really interesting game theory problem at David Cowan's blog. The problem not only is about strategy, but its proof is interesting mathematically too. Here is the puzzle:

How to split a cab fare fairly using game theory
I came across a fantastic game theory article that appeared in the Wall Street Journal Number's Guy blog all the way back in 2005. The article is about three friends who agree to share a cab, and the possible ways they can split the costs. I highly recommend you read the article. The ...

Dividing up Halloween candy: the strategy to get the best candy for yourself
One of the things I used to enjoy about trick or treating was the surprise factor. Each house offered different candy, resulting in a nice mix. But the variability lead to some issues too. Many times my brother and I would go to the exact same houses, but we would end ...

Puzzle: who wins this dart game?
Alice and Bob play the following game with their friend Charlie. Charlie begins the game by secretly picking a spot on the dartboard. The spot can be anywhere on the board, but once picked it does not change. Then Alice and Bob each get to throw one dart at the board. At this ...

Warren Buffett’s other political proposal
Warren Buffett has recently been making headlines with the controversial "Buffett Rule" calling for a tax raise on millionaires. But this isn't the first time Buffett has said something interesting politically. Now is a good time to recount an amusing proposal he made in an op-ed in 2000 about political campaign finance ...

When game theory backfires: a case study of Robert Campeau’s takeover bid
In 1988, Canadian financier Robert Campeau was attempting a takeover of Federated, a retail congomerate that owned Bloomingdales. The negotiations were quite interesting, and in 1990 Fortune magazine went so far as to call it "The Biggest, Looniest Deal Ever." One of the notable strategic elements was a "two-tiered offer" that Campeau ...

How to reduce employee theft without nagging: 4 tips from behavioral economics
image by Nisha A Employee theft is extremely common. I would hazard that even the best of us has stolen something from an employer. Most people do not view taking a few pens or printing personal material as a big deal. In fact, some people view it as an unpaid benefit ...

Another way to explain the Prisoners’ Dilemma to high school students
The Prisoners' Dilemma is one of the most interesting problems in game theory. It demonstrates the idea of Nash equilibrium in a stark fashion, and the mathematical requirement is very minimal. Perhaps its only flaw, if there is one, is the subject matter of criminals and police, which is sexy but ...

Negotiating with the mob – Game theory in the Dark Knight part 2
In my original post about Game theory in The Dark Knight, I discussed the opening bank robbery scene and compared it to the pirate game. I mentioned the film was full of strategic thought and a great way to illustrate game theory concepts. In light of recent Batman news, like Facebook ...

Amazon and the state of Illinois play a game of chicken over online tax collection
Yesterday, Illinois passed the so called "Amazon tax," a measure to collect sales tax on online commerce. If signed by Gov. Pat Quinn, the plan would require online retailers, such as Amazon.com and Overstock.com, to collect a 6.25 percent sales tax. Currently only companies with a physical presence in Illinois are ...

Game theory in High Stakes Poker
I came across a great hand on the TV show High Stakes Poker. The hand is from Season 3, Episode 12, and it features poker professionals Phil Ivey and Brad Booth (yes, the same Brad Booth who used some psychology and game theory in Poker After Dark). Some background on the hand: ...

Discover Bank savings account: why I don’t trust it
Recently I considered opening an online savings account at Discover Bank. I was intrigued for a couple of reasons. The appeal started with the rate. The savings yield was very competitive and even slightly higher than ING Direct. As of this writing, Discover Bank offers a 1.35% APY versus ING Direct's ...

Game theory in Jersey Shore product placement
Product placement gets tricky when a celeb's behavior sends the wrong image. Handbag companies were not happy to see reality star Snooki on Jersey Shore vomit in their handbags and defile their brands. And so, they fought back in an interesting way. Via NBCPhiladelphia: Well, it ends up that fashion powerhouses like Gucci ...

Game theory in Poker After Dark
There was a hand in the TV show Poker After Dark with some interesting strategy. The hand is from Season 6, Episode 49, and here's a clip where the hand gets interesting on the river: Youtube video: Poker After Dark hand at 7:52

A game to make driving safer
This is a very amusing idea to get people to obey the speed limit: Youtube video: speed camera lottery

Credible vs non-credible threat
In game theory, a threat is non-credible if it will never be executed. In real life, things are more nuanced. Len Fisher's Rock, Paper, Scissors: Game Theory in Everyday Life contains an amusing story in footnote 136 that illustrates: When I was a visitor at a Cambridge college in the United Kingdom, ...

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 ...

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 ...

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

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 ...

Bluffing in poker and game theory
I came across an interesting video clip about bluffing in poker. The video clip features mathematician Ken Binmore and concerns betting strategy in poker. Binmore explains why poker pros bluff wildly and suggests the reason why amateurs don't bluff enough. The advice was timely as it actually helped me in my most ...

Excessive punishments and game theory
How much punishment is enough? This is an interesting question for game theory. One of the reference models is the repeated Prisoner's dilemma where players have to use the threat of punishment as a means to achieve cooperation. Sometimes harsh punishment is the right move. I discussed this before in the context ...

Game theory at Denny’s
After a late night out, I found myself at the only eatery still open in the suburbs, the late night haven that is Denny's. When paying for the meal, I noticed a curious offer on the receipt that read something like: If your receipt does not list a food or drink you ...

Game theory on Colbert Report – mutually assured destruction
I get a kick out of the edgy comedy on The Colbert Report. It's amazing how Stephen Colbert makes a mockery of opposing ideas through caricature and showmanship. Last week Colbert was playfully discussing nuclear arms. He was interviewing Joseph Cirincione, a representative of a nuclear disarmament lobby, the Ploughshares Fund. ...

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 ...

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 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 ...

4 tips for winning in a game of chicken
The game of chicken is often told through a story about reckless teenagers. In the classic game, two teenagers are driving towards each other on a crash course. The point of the game is to overcome fear and stay on course. The driver that gets scared and swerves away is ...

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 ...

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, ...

Manage your career like a professional athlete: 4 strategic lessons from LeBron James’ free agency
[Update: Title and text edited to reflect a new idea that hit me unexpectedly] The old rules at work have been rewritten. Company loyalty is vanishing and competition has never been tougher. New rules call for a revised way of thinking, and Stephen M. Pollan and Mark Levine in Die Broke ...

How to negotiate at your job using game theory
My underpaid friend used every trick during salary negotiations to no avail. This year she got the raise she deserved. The trick that finally worked was getting sick. My friend joked the company would only realize her value after she left. By chance, it happened much sooner. My friend became very ...

The Crummey trust and game theory: understanding the grim trigger strategy
My friend never broke curfew during high school. The consequences were too dire. His parents had threatened to cut off his allowance and scale back on helping him pay for college. Years later I would recognize the parents' strategy as an important game theory concept. They were playing what is known ...

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 ...

Game Theory in The Dark Knight: the opening scene (spoilers)
The newest Batman movie The Dark Knight absolutely stunned me. Not since Dr. Strangelove has a movie contained so much game theory. A lot of people have focused on a scene near the end of the movie. But there is so much more to see. In fact, I'll be so ...

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 ...

Voting Power in Israeli Judge Selection and the Shapley-Shubik Index
  source: ninjapoodles via flickr How many votes should be necessary for a decision? Is a simple majority sufficient, or should a higher standard be applied, such as a consensus? These are questions and circumstances we all face, whether as a voter or an organizer. Understanding voting theory can help you understand the ...

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 ...

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 ...

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 ...

Use Randomization to Cut Costs in Security and Enforcement–It Worked for American Airlines
Game Theory 101: keep your opponents off guard. If you can do that, you don't need to work very hard. Cops know this. They can't monitor all motorists, so they randomly assign squad cars to high traffic areas. They put empty squad cars on the side of highways. The threat of ...

The Ultimatum Game and The Hollywood Writer’s Strike
Once during college, an annoying person asked me for game theory help. I offered to help even though it interrupted my own work. It was hard to turn down someone who lived in the same dorm. I offered to help, but wanted something in exchange. The person was a teaching assistant ...

Strategic Commitments: How to Lose Weight and Live up to New Years Resolutions
I went through on a two-year decision and I finally shaved my head last Friday. I got plenty of reactions from family and friends. I am happy with the look and lots of people have supported it. But even supporters have been puzzled: Why now? Why would you shave your head ...

How can you stop free riders and games of chicken? Try changing the game
Here is some advice you can take to the office: if you aren't winning the game you are playing, consider changing the game. If you find yourself yelling at people, please stop and think about why people are acting that way. Just asking people to change is hard. Rational people respond ...

3 tips for threatening many people at once
The RIAA won a legal battle on Friday when a Minnesota woman was found guilty of copyright infringement for file sharing and fined for damages of $220,000. Although the award was significantly smaller than the requested $3.9 million plus legal fees, the RIAA considers the case a victory. Is it ...

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 ...

5 ways to make your threat appear credible
A word of caution: I write this article not to encourage deceit, but to arm honest people with the means for proper defense. There are two kinds of threats: credible and non-credible. A threat is credible if it will likely be followed through. For instance, when utility companies threaten to disconnect ...