The lawyer slides a document across the mahogany desk. Fifty pages of clauses, subclauses, and contingencies for every imaginable scenario. The business partner nods approvingly. Everyone feels protected. Three months later, something happens that nobody thought to put in the […]
Picture someone standing in their kitchen at midnight, staring into the refrigerator. Earlier that day, they swore this would be the night they’d stick to their diet. They even threw out the ice cream. But now they’re considering whether gas
The ‘Sophisticated’ vs. ‘Naïve’ Mindset: Which One Are You? (Dynamic Inconsistency) Read More »
Picture a manager who consistently gives in to an employee’s unreasonable demands. The goal is workplace harmony. The result? More demands, less respect, and a team that watches the precedent with interest. This is the appeasement paradox in action: the
Appeasement Paradox: When Being Nice Makes Everything Worse According to Game Theory Read More »
The poker player who always bluffs stops being scary. The tennis player who always serves to the backhand becomes predictable. The business that always undercuts competitors on price eventually teaches the market to wait for discounts. Commitment sounds noble. It
Why Being 100% Committed to One Strategy Is 100% Wrong (Mixed Strategy) Read More »
Picture two neighbors living on a quiet street. Both want nothing more than to tend their gardens and enjoy Sunday afternoons in peace. Neither has any desire to harm the other. Yet both spend their evenings installing bigger locks, buying
Why Two Peaceful Nations Still End Up Fighting (Hobbesian trap) Read More »
Picture two economists at a dinner party. One believes the stock market will crash next month. The other thinks it will soar. They debate for hours, each presenting data, charts, and carefully constructed arguments. They part ways still disagreed, each
The Nobel Prize for Proving Rational Disagreement Can’t Exist (Aumann’s theorem) Read More »
Here comes the deadlock. Two neighbors stand on opposite sides of a snowy driveway, each waiting for the other to shovel first. Neither wants to be the sucker who does all the work. Three hours later, both are still stuck
The Psychology of ‘Better Safe Than Sorry’ (and How it Creates Deadlock) Read More »
John Maynard Keynes never actually organized a beauty contest, which is perhaps the first irony worth savoring. The man who would reshape modern economics drew his famous metaphor from a newspaper parlor game popular in 1930s Britain, where readers submitted
Game theory has become an indispensable tool for understanding strategic decision-making across countless fields. At its heart lies a deceptively simple concept: the one-shot game, where players make decisions simultaneously without the prospect of future interaction. But when and how
The Origin Story: When Did Game Theory First Formalize One-Shot Games? Read More »
Game theory might be one of the most powerful analytical frameworks for understanding strategic behavior. Yet beneath its elegant mathematical surface lies a fundamental distinction that shapes how we model, analyze, and predict outcomes in strategic situations. Static and dynamic
Static vs. Dynamic: The Two Faces of Game Theory Read More »