$10 if you guess who will be fired next – boss demonstrates how not to motivate employees
There are proper ways to use incentives to motivate employees. I have written about how incentives can help improve productivity and even reduce employee theft. Then there are the abysmal incentives that are dreamt up by sadistic bosses. This week there were news reports of a boss who made a contest ...

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 ...

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 ...

Gaming gift card bonuses – a math excursion
I'm not a fan of gift cards, but a recent promotion got my attention. A store was giving a bonus for gift card purchases. It worked like this: if you purchased a $50 gift card, then you would get a $10 gift card for free. I thought the 20 percent bonus ...

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 ...

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 ...

Las Vegas and game theory: an application of the Prisoner’s Dilemma
The Prisoner's Dilemma is a great example from game theory. The game illustrates why individuals might not cooperate even if it is their best interest to do so. I will briefly summarize the game below, but if you're familiar with the Prisoner's dilemma you can safely skip ahead to the section ...

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 ...