Game theory is a study of strategic decision making. Specifically, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers". An alternative term is interactive decision theory. Game theory is mainly used in economics, political science, and psychology, as well as logic and biology. The subject first addressed zero-sum games, such that one person's gains exactly equal net losses of the other participant(s). Today, however, game theory applies to a wide range of behavioral relations, and has developed into an umbrella term for the logical side of decision science, including both humans and non-humans (e.g. computers).
One of the defining characteristics of Game Theory is that its conclusions ususally appear counterintuitive. Here's a list:
- People often take aggressive postures that lead to mutually bad outcomes even though mutual cooperation is mutually preferable. Source.
- Even if everyone agrees that an outcome is everyone’s favorite, they might not get that outcome. Source.
- Sometimes having fewer options is better than having more options. Source.
- On a penalty kick, soccer players should kick toward their weaker side more frequently than their stronger side. Source.
- In a duel, both gunslingers should shoot at the same time, even if one is a worse shot and would seem to benefit by walking closer to his target. Source.
- There’s a reason why gas stations are on the same corner and politicians adopt very similar platforms. And it’s the same reason. Source.
- Closing roads can improve everyone’s commute time. Source.
- Fewer witnesses to a crime might be preferable to more. Source.
- You should bid how much you value the good at stake in a second price auction. Source.
- If you pay the value you think something is worth, you are going to end up with a negative net profit. Source.
- Lighting money on fire is often profitable. Source.
- Going to college can be valuable even if college doesn’t teach you anything. Source.
- An animal might be better off jumping high in the air repeatedly than running away from a predator. Source.
- Knowing just slightly more about the value of your car than a potential buyer can make it impossible to sell it. Source.
- Nigerian email scammers should say they are from Nigeria even though just about everyone is familiar with the scam. Source.
- Everyone might mimic everyone else just because two people chose to do the same thing. Source.
- A biased media may be better than an unbiased media. Source.
- Every voting system is manipulable. Source.
- You might want to abstain from voting even though you strictly prefer one candidate to another. Source.
- Unanimous jury rulings are more likely to convict the innocent than simple majority rule if jurors vote intelligently. Source.
- The House of Representatives caters to the median member of the majority party, not the median member of the institution overall. Source.
- Plurality voting leads to two-party systems. Source.
- United Nations Security Council members sometimes do not veto resolutions even though they strongly dislike them. Source.
- Without the ability to propose offers, you receive very few benefits from bargaining. Source.
- Settlements always exist that are mutually preferable to war. Source.
- Fighting wars removes the need for war. Source.
- You might want to shoot to miss in war. Source.
- Nonproliferation agreements can be credible. Source.
- Weapons inspections are useful even if they never find anything. Source.
- Economic sanctions are useful even though they often fail in application. Source.
- Pitchers shouldn’t change their pitch selection with a runner on third base, even though curveballs are more likely to result in wild pitches. Source.
- Sports teams can benefit from a lack of player safety in contract negotiations. Source.
- You shouldn’t try to maximize your score in Words with Friends/Scrabble. Source.
- In speed sailing, competitors deliberately choose paths they believe will be slower. Source.
- The first player wins in Connect Four. Checkers ends in a draw. Source.
- Chess has a solution, though we don’t know it yet. Source. (Or maybe not.)
- Warren Buffett was never going to pay $1 billion the winner of the March Madness bracket challenge. Source.
- Park Place is worthless in McDonald’s Monopoly. Source.
- Losing pays. Source.
- As drug tests become more accurate, they should be implemented less often. Source.
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