The Game Theory of everyday life
Updated: Aug 26, 2020
Remember the days when you were free and could travel in the Delhi metro , you find a vacant seat in the metro. However the seat is a "reserved" seat ( for those of you who don't know , a reserved seat is a seat reserved for ladies and senior citizens ). Now , you need to take the decision of taking the seat or not. Various thoughts hover your mind - "I may have to free the seat anytime soon " , "it has been a tiring day , let it be " and so on.
Game theory somewhat deals with situations like these , rather more complex ones. It is actually a "strategic art of decision making." Game theory can be applied to simple problems like taking up a seat in the delhi metro , playing a game of rock paper scissors and to complex problems like deciding the foreign trade policy , world predictions and even the decisions of confessing you feelings to someone you like ;)
Infact , Bruce Bueno de Mesquita ( an academic at New York University ) made several predictions like the Egypt President falling from power in May 2010 to Pervez Musharraf leaving the office. He confessed that all this has been possible of a "game" he designed keeping game theory as the basis of it. Some even say that game theory was used to find Osama Bin Laden. However , I am not really sure about how that worked.
Game theory does not yield the best possible outcome , just the MOST LOGICAL one.
Consider this situation-
Here the best strategy ( dominant strategy ) for both the parties is TO STAY SILENT. However , this strategy is not the SOCIAL OPTIMAL.
Game theory aims to give us a better perspective of things thus helps us form a better strategies.
To know more about the game theory , check out these YouTube links and I might do a second post about the same. To get updates about the latest posts you can subscribe to the blog -
Sources - 1.https://www.google.com/amp/s/amp.economist.com/technology-quarterly/2011/09/03/game-theory-in-practice
2.Candiceandice Chung's research paper " Why smart women go for jerks "
3.My economics class :)