Game theory > Threats

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 ...

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 ...