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Applied Game Theory

Summary #

Game Theory is the study of decision making using mathematical models. Despite it's theoretical-sounding nature, Game Theory is applicable to many real-life decisions. One of the interesting features of Game Theory is unexpected (for humans) results given a set of assumptions.

(Video: YouTube)

Commentary #

If there's a decision to be made, there's a game-theoretic model of that decision. It's not always easy to compute, but it exists. Things like the Prisoner's Dilemma are the result of game theory analysis.

Meta #

In the video above, Ibrahim's decision about whether to choose "Split" or "Steal" is morphed into a meta-game about whether or not he wants to get any money at all. While I relish this approach, it looks like it can only really be used once on this show because future participants will have to doubt the veracity of the claim "I'm going to steal, so just choose split."

See Also #