Game Theory
The Basic Idea
The Milton Bradley board game, The Game of Life, was not far off the mark. In many ways, life does resemble a game, in which we are all players. There are rules to follow, opponents to compete with, and teammates to cooperate with. Game theory provides models for conceptualizing interactions among competing individuals. Despite its name, game theory is not exclusive to the study of games. It has a wealth of applications, from economics to psychology. This theory is applicable in any situation in which the actions of one party have influence over the actions of the other relevant parties. A key aspect of this theory is that it is based on certain assumptions, including that all involved parties understand the rules of the “game” and that people are rational decision-makers. Of course, humans have the capacity to err and we often make irrational decisions, which means that game theory is not infallible. As a general rule, however, it is a useful tool for predicting the outcomes of certain interactions between decision-makers.
[Game theory is] essentially a structural theory. It uncovers the logical structure of a great variety of conflict situations and describes this structure in mathematical terms. Sometimes the logical structure of a conflict situation admits rational decisions; sometimes it does not
– Anatol Rapoport
About the Authors
Dan Pilat
Dan is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. Dan has a background in organizational decision making, with a BComm in Decision & Information Systems from McGill University. He has worked on enterprise-level behavioral architecture at TD Securities and BMO Capital Markets, where he advised management on the implementation of systems processing billions of dollars per week. Driven by an appetite for the latest in technology, Dan created a course on business intelligence and lectured at McGill University, and has applied behavioral science to topics such as augmented and virtual reality.
Dr. Sekoul Krastev
Sekoul is a Co-Founder and Managing Director at The Decision Lab. He is a bestselling author of Intention - a book he wrote with Wiley on the mindful application of behavioral science in organizations. A decision scientist with a PhD in Decision Neuroscience from McGill University, Sekoul's work has been featured in peer-reviewed journals and has been presented at conferences around the world. Sekoul previously advised management on innovation and engagement strategy at The Boston Consulting Group as well as on online media strategy at Google. He has a deep interest in the applications of behavioral science to new technology and has published on these topics in places such as the Huffington Post and Strategy & Business.
