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: ...

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

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 ...

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 ...

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 ...

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 ...

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 ...