Why goal-setting can backfire, study
I am a huge fan of setting goals and figuring out concrete steps to solve them. Goals have helped me in weight loss, saving for retirement, and post more frequently on this blog. But there are flaws to goal-setting, which are explored in the amusingly titled study Goals Gone Wild: The ...

Puzzle: how many Christmas trinkets to buy?
I came across a very interesting problem in the math section of reddit. The problem is about a business that wants to decide how much inventory of a product to buy facing an uncertain demand. The business wants enough to maximize profits, but it knows that unsold units will be ...

Why game theory matters for business (quote)
A few weeks ago, I spoke to college students and business professionals in India about game theory. Here is a picture of me from one of the talks: Accepting trophy from NMIMS in Mumbai--said to be "one of the best business schools in India"--me on left I was thrilled to discuss game theory ...

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 strategy of writing a complaint letter or email
source: aturkus via flickr I remember the first time I complained to a company. I hastily made an angry call and was flatly rejected. I composed myself and five minutes later I made another call. This time I used a calm tone and I read from a complaint script I found ...

Why Toyota wants GM to be saved: a game theory case study
Here's the latest twist in the auto bailout: Detroit's Big Three aren't the only automotive companies that want to see the government step in with some much needed financial help. Overseas automakers, most notably Toyota Motor, all endorse some form of federal aid to keep General Motors, Chrysler LLC and possibly Ford ...

Figuring out how much your time is worth–does it make sense?
Question: What's the best way to value your time? I am trying to make a decision about whether to hire help for my house. My answer: There are many ways to figure out how much your time is worth. You can get a quick estimate of your hourly rate by taking your salary ...

Why those price match guarantees may end up costing you a fortune
This week's game theory post is motivated by a question from loyal reader JoeP about pricing strategies. If you have a question about personal finances or game theory, feel free to send me a line. Here is what JoeP wrote: An interesting thought stuck me yesterday as I drove by 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 ...

Why buying on credit online may make sense: my experience buying business cards
Recently I received business cards from an online purchase. After checking the quality and looking for misprints, I was satisfied with the cards. But being a paranoid, I wondered if I got all 500 cards I ordered: I mean, if they sent fewer cards as standard practice, what sane business ...

Three ways you can value your time for money decisions
I don't know what happened to me at that hypnotherapist and, I don't know, maybe it was just shock and it's wearing off now, but when I saw that fat man keel over and die - Michael, we don't have a lot of time on this earth! --Office Space Every one ...