Very interesting Concept and I got this best book "Rock,Paper,Scissors" by Len Fisher.
I didn't see the movie beautiful mind and if you did or didn't you should know John Nash and Nash's equilibrium.
Why is it important to learn game theory?
Because you like angry birds? No.
Because Len Fisher is a good author. Yes.
Because it is useful and interesting. Yes.
Prisoner's dilemma is the basis of most of the game theory. Let us learn about that today.
Watergate scandal - Nixon as president of US secretly wanted to bug Democratic National Committee (DNC) headquarters at the Watergate complex on June 17, 1972 which 5 people were tasked to do.
Long story short Nixon denied then accepted the act/cover-up and resigned.
What does this have to do with Game theory?
Bernard and Frank were 2 of the folks who were involved in the break in and got caught by cops in watergate hotel.
The prosecutor offered both Bernard and Frank (who couldn't communicate to each other ) the following
similar to the picture below - the numbers are not the same/true.
If Frank accepts and Bernard doesn't then Frank gets out of prison term = Free and Bernard is going to Prison for long time (20 years).
If Bernard accepts and Frank doesn't then Bernard gets out of prison term = Free and Frank s going to Prison for long time (20 years).
If both accept then both get shorter prison term (say 8 years as below)
If both don't accept the crime then both get shorter prison term (say 6 months below)
The best thing that can happen is for both to shut up!! but this means that both have to trust the other person will not accept!
You and your brother(sister or friend) have taken stuff got caught and were in this dilemma... not that you were in a prison. Can you trust your brother/friend or sister that would co-operate ?
John nash won nobel prize for game theory.
Game Theory is played in market place between companies.
Look at the example below..Which company will spend R&D money on a new business platform?
Microsoft and RIM(not in business anymore?- makers of blackberry) as a group vs. Apple and Google. You can create own for Apple Vs. Google and Since I like them both I will pitch them against my 'paycheck' platform provider company Microsoft.(remove RIM who cares)
Rock Paper Scissors is played on a everyday basis during 3 way negotiation. In a real estate deal you bid for a house and you think it is between you and the seller. The seller gets another offer... there you go.. now there is a game between 3 people - buyer,seller and the competing buyer. Rock,Paper,Scissors..
I cut you choose:
If two kids are fighting for a piece of cake,ask one kid to cut and the other to choose. If you have chores around the house split it into 2 sets of chores and ask your spouse to choose.
If someone doesn't take the last piece of cake in a tray (or the last piece of samosa in our parties) then you are playing a game too...
There are 7 deadly dilemmas
Tragedy of commons - Multi person Prisoner's dilemma.
If there is a common place where every person who owns their cow are allowed to graze then adding one more cow by any of the owners adds to the problem.
Think water rations in Texas - if we all follow the water regulation and water our grass when there is a drought all of us will feel that our grass suffers.
Few of us can water and break the law and it might still not have an effect. If everyone breaks the law then there will be no water. Got it?
Global warming,Over fishing - lots of complex problems between nations have this game behind them.
Benefits of credit cards while some are in the credit trap
dvd piracy - some people have to go to theater for rest of us to watch pirated(or original dvd.)
Can you spot Tragedy of commons next time when you witness the same?
Volunteer's dilemma
Stag Hunt
in the meantime Stag Hunt is the best and highest reward structure that is all about collaboration. 4 people can kill a stag or deer. One person can kill a rat/mice. Only when 4 people collaborate - you get the point.. forget eating animals back to real life.
On the other hand - Prisoner's dilemma was about reward and Stag Hunt is about Risk.
How many senators will vote against Patriot act in 2000?
If you are in Tibet, each person who wants to talk to a westerner has to think about Risk of getting caught by police (because his neighbor might be a spy) and Urge to pass their thought.
These games at the highest level are mind games played by humans.
Animals play simple fight or flight responses. Humans play deadly games which are not easy to comprehend.
What games do you know?
Which ones do you play?
What strategies do you use?
Can you share them?
Keep Learning
Sivakumar Manikanteswaran
I didn't see the movie beautiful mind and if you did or didn't you should know John Nash and Nash's equilibrium.
Why is it important to learn game theory?
Because you like angry birds? No.
Because Len Fisher is a good author. Yes.
Because it is useful and interesting. Yes.
Prisoner's dilemma is the basis of most of the game theory. Let us learn about that today.
Watergate scandal - Nixon as president of US secretly wanted to bug Democratic National Committee (DNC) headquarters at the Watergate complex on June 17, 1972 which 5 people were tasked to do.
Long story short Nixon denied then accepted the act/cover-up and resigned.
What does this have to do with Game theory?
Bernard and Frank were 2 of the folks who were involved in the break in and got caught by cops in watergate hotel.
The prosecutor offered both Bernard and Frank (who couldn't communicate to each other ) the following
similar to the picture below - the numbers are not the same/true.
If Frank accepts and Bernard doesn't then Frank gets out of prison term = Free and Bernard is going to Prison for long time (20 years).
If Bernard accepts and Frank doesn't then Bernard gets out of prison term = Free and Frank s going to Prison for long time (20 years).
If both accept then both get shorter prison term (say 8 years as below)
If both don't accept the crime then both get shorter prison term (say 6 months below)
The best thing that can happen is for both to shut up!! but this means that both have to trust the other person will not accept!
You and your brother(sister or friend) have taken stuff got caught and were in this dilemma... not that you were in a prison. Can you trust your brother/friend or sister that would co-operate ?
John nash won nobel prize for game theory.
Game Theory is played in market place between companies.
Look at the example below..Which company will spend R&D money on a new business platform?
Microsoft and RIM(not in business anymore?- makers of blackberry) as a group vs. Apple and Google. You can create own for Apple Vs. Google and Since I like them both I will pitch them against my 'paycheck' platform provider company Microsoft.(remove RIM who cares)
Rock Paper Scissors is played on a everyday basis during 3 way negotiation. In a real estate deal you bid for a house and you think it is between you and the seller. The seller gets another offer... there you go.. now there is a game between 3 people - buyer,seller and the competing buyer. Rock,Paper,Scissors..
I cut you choose:
If two kids are fighting for a piece of cake,ask one kid to cut and the other to choose. If you have chores around the house split it into 2 sets of chores and ask your spouse to choose.
If someone doesn't take the last piece of cake in a tray (or the last piece of samosa in our parties) then you are playing a game too...
There are 7 deadly dilemmas
Tragedy of commons - Multi person Prisoner's dilemma.
If there is a common place where every person who owns their cow are allowed to graze then adding one more cow by any of the owners adds to the problem.
Think water rations in Texas - if we all follow the water regulation and water our grass when there is a drought all of us will feel that our grass suffers.
Few of us can water and break the law and it might still not have an effect. If everyone breaks the law then there will be no water. Got it?
Global warming,Over fishing - lots of complex problems between nations have this game behind them.
Benefits of credit cards while some are in the credit trap
dvd piracy - some people have to go to theater for rest of us to watch pirated(or original dvd.)
Can you spot Tragedy of commons next time when you witness the same?
Free Rider - Taking advantage without contributing
examples -
Standing in a sports or non sports events and blocking other people's view while enjoying a better view for ourselves
Burglary
Not joining a trade union and still enjoying benefits
Disarmament - People wanting to disarm a country would still benefit if the country makes arrangement for protection - Singapore doesn't have to have a big army while the treaty with US will help it get the massive structure to protect it.
Peter Ustinov commented - "Corruption is nature's way of restoring our faith in democracy"
The author of the book talks about a case where few people share one secretary and run to her creating emergencies. She is the shared resource and everyone wants to be the free-rider and she dealt with it by
"Lack of planning on your part does not justify an emergency on my part".
This is a good way to deal with free-rider and with anyone who demands anything from you without giving you time to plan/respond.
Battle of Husband and Wife (google to know this game) -
When you (the male) want to go to a movie or watch tv or go for a game (Which man doesn't want to sit and analyze,men have lots of choices in how to watch sports - few want to play though and they go inside the TV and become players ) and your wife wants to go shopping(Which wife doesn't want to go shopping? Women have lots of choices in the shops they would love to shop) who wins?
Chicken
When 2 people walk towards each other in a sidewalk , when Russia and US face off with weapons near Cuba whoever steps out is a 'chicken'. In a fight with anyone in your life whoever is ready to compromise has to tackle the 'chicken' problem. It takes a Mahatma to be human!
Volunteer's dilemma
When asked for a volunteer if some one volunteers you are not required to volunteer.If no one volunteers you are not safe - you are now part of the pool.
When was the last time you volunteered ? Was it forced volunteering? Think about it.
Stag Hunt
in the meantime Stag Hunt is the best and highest reward structure that is all about collaboration. 4 people can kill a stag or deer. One person can kill a rat/mice. Only when 4 people collaborate - you get the point.. forget eating animals back to real life.
On the other hand - Prisoner's dilemma was about reward and Stag Hunt is about Risk.
How many senators will vote against Patriot act in 2000?
If you are in Tibet, each person who wants to talk to a westerner has to think about Risk of getting caught by police (because his neighbor might be a spy) and Urge to pass their thought.
These games at the highest level are mind games played by humans.
Animals play simple fight or flight responses. Humans play deadly games which are not easy to comprehend.
What games do you know?
Which ones do you play?
What strategies do you use?
Can you share them?
Keep Learning
Sivakumar Manikanteswaran
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