Read: "Game Theory"

Posted Jun 27, 20204 min read

I recently read "Game Theory" and wrote about some of my gains.

  • What is game theory
  • Game in life
  • How to get game advantage

What is game theory

Game theory is a methodology that studies how a decision maker should make decisions under given conditions in order to maximize his own interests.

The decision maker can be an individual or a team. If it is an individual, it means something like "people are not destroyed for themselves". Individuals mainly think about how to maximize their own interests. If it is a team, you have to consider maximizing the interests of a group of people, which may sacrifice some individual interests.

Take a classic case:

A farmer recently raised a cat, and every day he happily catches mice, which makes the originally mad mouse frightened. So the mice had to convene a meeting with the content "How to tie a bell around the cat's neck", so that every time the cat passed by, the mice could hear the bell sound and escape in advance.

At the meeting, although the mice all agreed with this view on the surface, they were also very difficult. Who should do this? After all, if you want to tie a bell around the cat's neck, it means there is a risk of having the cat dinner.

  • From the perspective of the team:doing this is very beneficial to the entire team and is worth doing.
  • From a personal point of view:Doing this thing is very risky for individuals. If you have other companions to do it, you can get it for nothing, so it is not worth doing.

How to solve this dilemma?

Option 1:Still choose a representative to do this, but you must promise to give it a return of the same value, and with a sufficiently large return, some individuals are willing to take risks.

But under normal circumstances, it is difficult to define an equal return.

Scenario 2:The mice do this together, and concentrate the power of the masses to fight against power. In this way, the probability of success is very large. Even if it fails, the risk can be effectively shared.

Although Plan 2 seems to be a more reliable plan, it is not easy to achieve this. Group action is difficult to ensure that the individual has no ambitions. If the individual has his own small abacus, then if he really acts, it will be "a thousand miles" The dike broke down in the ant cave."

Game in life

There are so many games in life. I chose a more interesting case here.

A company's project is being tendered, and it was initially planned to choose the lowest price among several bidding companies.

For each bidding company, everyone wants to win the bid, but also wants to maximize their own interests, so they will quote:

  • The bid price must be greater than the cost price.
  • The bid price cannot be too high to avoid being snatched away by other companies.

Therefore, the final price of the bidding company is:cost price + profit, and everyone adds the profit appropriately on the basis of cost.

For bidding companies, they hope to pay as little as possible. Is it possible for bidders to report prices equal to or even lower than the cost price?

In fact, it is also possible that if the bidding company wins the bid of the lowest bidding company, but the price of the winning bid is changed to the penultimate lowest price, the result will be different.

At this time, the bidding company will quote:

  • The bid price can be equal to the cost price or even lower than the cost price.
  • The bidding price should be the lowest to get the bidding.

Because even if the cost price is quoted, the resulting money will be greater than this price, and will not lead to no profit, so the bidding company is likely to obtain a lower quotation.

How to gain game advantage

After seeing the above two examples, we already have a certain understanding of the game. Next, let's discuss how to obtain the advantage of the game?

When we buy things, we have said the price, but even the price after the price, there is a certain gap between the real cost price.

How to bargain more effectively?

  • Establish countermeasure thinking.

    • That is:you know, I know, I know you know, you know I know you know.
    • Let the seller think that we are not Xiaobai, and don't ask for price.
  • Dynamic thinking.

    • That is:I may not know today, but I will know later.
    • Let the seller think that if you pit me, there will be no cooperation next time.
  • Multilateral thinking.

    • That is:understand that stakeholders may not only be sellers and buyers, but also middlemen.
    • Need to analyze information from multiple stakeholders.
  • Non-quantitative thinking.

    • That is:understand that the information is not 100%correct.
    • For example, if the product is 100%qualified, it may still fail.

In addition to this, we can also instill a lot of confusion by instilling a lot of information, thereby discovering the other party's flaws.

For example, when the prisoner was interrogated, in order to cover up the crime, he had thought of a set of rhetoric in an attempt to fool him. But the police will find a way to instill a lot of information into the other party at once, such as:8 o'clock last night, where? Are you sure you didn't sleep at nine Do you usually sleep at this point? Did you quarrel with others yesterday? Omit 100 questions.

Sociologists have conducted a survey. In the face of a large number of questions and information input, it will be difficult for the mind to maintain calmness and rationality. When the brain is overloaded, it will often lose its original control. The original well-designed rhetoric It may be exposed by the indiscriminate bombardment of information.

to sum up

After reading this book, I feel that I have read a lot of methodologies. Whether it works or not, it gives me a broader way of thinking, which is quite good. Finally, it should be emphasized that this methodology cannot be directly applied in life. The specific cases in the book are based on the ideal situation. In reality, the situation will be much more complicated, so readers must not be blunt.

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