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Game theory is a mathematical tool that theorizes hypothetical models of conflicts between participants and demonstrates that confrontation does not have to be negative. The study of game theory allows to expand the scope of worldview and gives a qualitatively new perspective on the structure of human relations. It is possible to tell with certainty that game theory knowledge divides people into two classes: the one that confidently uses known strategies and remains in a prize (or at least not in a loss), and the one which operates randomly and unreasonably. This essay aims to discuss game theory in terms of how it applies to my interactions over the last week.
First of all, I would like to say that game theory finds its application everywhere if one can detect it. International relations is one of the fundamental examples of the use of theory. During negotiations, political leaders focus on the benefits for their country in order to ensure security and economic growth. This is also true of the nuclear deal described in Kroenig (2013). In terms of game strategies, the signing of the disarmament treaty was an attempt to Nash equilibrium no leader knows for sure whether their opponent will want to detonate a nuclear bomb, but agrees not to use it just in case. As a result, this dilapidated model collapses when aggressive politicians are demonstratively building up nuclear capability in the face of others.
In fact, if I evaluate my past interactions with people, I have used the Nash equilibrium strategy at least twice. Last week, I argued with my parents about which of us would be taking out the garbage. Obviously, neither side of the discussion wanted to do any dirty work, so we decided to use a fair game of rock-paper-scissors. I am sure my parents do not know how to analyze games much, so she will think I will be using the stone as most people do. (Farber, n.d.) My strategy was to anticipate her prediction of paper, so I will show the scissors. I expected a fast game, but before I won, we did about twelve rounds. I am sure that Nashs equilibrium was used here my parents and I read each others strategies, so our rounds were unsuccessful. In other words, we have come to a situation where everyone does not lose but also does not win. This could go on for a long time, but I remembered that the equilibrium is not always effective, so I decided to use a random sign scissors, while my parent calculated that I would throw a stone. As a result, I won, and she went to take out the garbage.
The second example of using a strategy, I realized only the other day, when I was thinking about the usual situation that happened on Monday. My friend and I agreed to meet in the park to go out and have something to eat, which could not be called useful. Nevertheless, I know my friend tends to be late, and several times I waited more than twenty minutes at the meeting place because he had just woken up or was late on his way. This time I had a choice to either come to the park at the appointed time, but risked waiting for him again or being late myself but not being the first. Looking ahead, I decided to hold off for fifteen minutes, but my friend was another ten minutes late, so I eventually lost. With experience in game theory, I would have applied the idea of Stag Hunt, which is based on trust (Belloc et al., 2019). For ease of analysis and demonstration of my loss, I will reflect on the possible outcomes in the matrix:
As can be seen from the matrix, the attractive option would be if we both came on time. If we both decided to be late, it would also be a case of equilibrium. Nevertheless, unfortunately for me, we unknowingly went down the highlighted path when I was losing, and my friend (he did not have to wait for me) was winning.
References
Belloc, M., Bilancini, E., Boncinelli, L., & DAlessandro, S. (2019). Intuition and Deliberation in The Stag Hunt Game. Scientific Reports, 9(1), 1-7. Web.
Farber, N. (n.d.). The surprising psychology of rock-paper-scissors. Psychology Today. Web.
Kroenig, M. (2013). Think again: American nuclear disarmament. Foreign Policy. Web.
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