Sunday, January 30, 2011

Game Theory in Everyday Life

I've added reading notes on Game Theory in Everyday Life to my site. The notion of applying the principles of game theory to situations that are not generally recognized to be games, per se, interests me - but unfortunately, the book itself fell short of the mark.

By virtue of its name, "game" theory is too often dismissed as a frivolous field of study, presumably related to sports or leisure activities. But in essence, examinations of "game" consider a situation where two (or more) players each has a goal it seeks to accomplish by interacting with the other players, choosing a course of cooperative or competitive action in order to accomplish their separate objectives.

This is germane to many real-life interactions, especially in he business world, in which competing or cooperating with other people in pursuit of our goals takes place in a culture that provides "rules" for interaction and the availability of options, some of which are mutually beneficial, some of which benefit ourselves at the expense of others, and others of which are ultimately counterproductive to our purposes.

As such, it is of particular interest to developing a corporate strategy for interacting with other firms to "win" a larger share of customers in a competitive marketplace, as well as for interacting with individuals (superiors, subordinates, peers, suppliers, customers, etc.) in the business environment.

Unfortunately, this particular book isn't of much help: it doesn't do more than scratch the surface, "revealing" what a reasonably intelligent person could observe on their own, and is based largely on anecdotal and experimental evidence that, while seemingly reasonable, seems more incidental than indicative.

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