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Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life
The international bestseller — don't compete without it! A major bestseller in Japan, Financial Times Top Ten book of the year, Book-of-the-Month Club bestseller, and required reading at the best business schools, Thinking Strategically is a crash course in outmaneauvering any rival. This entertaining guide builds on scores of case studies taken from business, sports, the movies, politics, and gambling. It outlines the basics of good strategy making and then shows how you can apply them in any area of your life.
393 pages, Paperback
First published January 1, 1991
1042 people are currently reading
10647 people want to read
About the author
Avinash K. Dixit
24 books126 followersAvinash Kamalakar Dixit (born August 6, 1944 in Bombay, India) is an Indian-American economist. He is currently John J. F. Sherrerd '52 University Professor of Economics Emeritus at Princeton University, Distinguished Adjunct Professor of Economics at Lingnan University (Hong Kong) and Senior Research Fellow at Nuffield College, Oxford.
Dixit received a B.Sc. from Bombay University in 1963 in Mathematics and Physics, a B.A. from Cambridge University in 1965 in Mathematics (Corpus Christi College, First Class), and a Ph.D. in 1968 from the Massachusetts Institute of Technology in Economics.
Dixit has been the John J. F. Sherrerd '52 University Professor of Economics at Princeton University since July 1989. He is also Distinguished Adjunct Professor of Economics at Lingnan University (Hong Kong) and Senior Research Fellow at Nuffield College, Oxford. He previously taught at Massachusetts Institute of Technology, at the University of California, Berkeley, at Balliol College, Oxford and at the University of Warwick. In 1994 Dixit received the first-ever CES Fellow Award from the Center for Economic Studies at the University of Munich.
Dixit has also held visiting scholar positions at the International Monetary Fund and the Russell Sage Foundation. He was President of the Econometric Society in 2001, and was Vice-President (2002) and President (2008) of the American Economic Association. He was elected to the American Academy of Arts and Sciences in 1992 and the National Academy of Sciences in 2005.
With Robert Pindyck he is author of “Investment Under Uncertainty” (Princeton University Press, 1994; ISBN 0691034109), the first text-book exclusively about the real options approach to investments, and described as “a born-classic” in view of its importance to the theory.
(from Wikipedia)
Dixit received a B.Sc. from Bombay University in 1963 in Mathematics and Physics, a B.A. from Cambridge University in 1965 in Mathematics (Corpus Christi College, First Class), and a Ph.D. in 1968 from the Massachusetts Institute of Technology in Economics.
Dixit has been the John J. F. Sherrerd '52 University Professor of Economics at Princeton University since July 1989. He is also Distinguished Adjunct Professor of Economics at Lingnan University (Hong Kong) and Senior Research Fellow at Nuffield College, Oxford. He previously taught at Massachusetts Institute of Technology, at the University of California, Berkeley, at Balliol College, Oxford and at the University of Warwick. In 1994 Dixit received the first-ever CES Fellow Award from the Center for Economic Studies at the University of Munich.
Dixit has also held visiting scholar positions at the International Monetary Fund and the Russell Sage Foundation. He was President of the Econometric Society in 2001, and was Vice-President (2002) and President (2008) of the American Economic Association. He was elected to the American Academy of Arts and Sciences in 1992 and the National Academy of Sciences in 2005.
With Robert Pindyck he is author of “Investment Under Uncertainty” (Princeton University Press, 1994; ISBN 0691034109), the first text-book exclusively about the real options approach to investments, and described as “a born-classic” in view of its importance to the theory.
(from Wikipedia)
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Displaying 1 - 30 of 165 reviews
January 8, 2012
Wonderful book on game theory. The examples from history, literature and from every day life make the discussions lively and entertaining. Mathematics and complex reasoning is kept to a minimum and conversational, easy-to-follow logic is generally adopted. The case studies at the end of each chapter helps to sum up understanding and we can easily breeze through the book with the assurance that the final chapter of case studies will refresh any idea that we might be unclear on. All in all, a great medium-difficulty-level introduction to the complex field. Not a bed time read though, unless your intention is to fall asleep quickly.
October 28, 2024
Engaging read about game theory and how to use these insights in business. Quite accessible, despite some of the baseball and American Football metaphors flying right over my head
The best way to surprise your enemy is to surprise yourself
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life is surprisingly relevant and full of insights for a book almost thirty years old. Despite the title, it is very much a book about game theory, and how, if one thinks through the actions of competitors full through rationally, current decisions can be inferred. Off course the work of Richard H. Thaler and Daniel Kahneman show that humans are far from this rational, still it is an interesting frame of mind.
The American Football metaphors used by Avinash K. Dixit go straight over my head, but for the rest this is highly readable and interesting.
Especially what makes commitments and threats credible (they must hurt the one issuing them) and the thinking around when one should, or should not, take the first step, is interesting. In a climate where irrationality is favoured, think of the unpredictability of Trump for instance, game theory does break down, but in general these are interesting insights in something I found quite esoteric initially during my MBA.
Quotes and thoughts:
It’s better to be a good strategist than a bad strategist
The first mover opens itself for strategic countering to other players in the market e.g. if the market leader bets on a certain product, the other market players can align themselves to an alternative
Sequential versus simultaneous interactions, in ignorance of other market players moves
Look ahead and reasoning back
In an even number of step negotiation 50/50 outcomes between two (equally powerful) parties are logical, while in uneven steps, it will be 1+n for the starting party and 1-n for the second party
If you have to take more risk, take them on the first serve
Dominant strategy: better in some circumstances and not worse in any, independent of your opponents
Eliminate dominated strategies sequentially to arrive at the best course of action (remove sequences of outcomes which have overall better alternatives available)
A two tiered bidding strategy to get majority control over a company, even if the blended rate of the offered share price is lower than an undifferentiated offer, can coerce shareholders to tender
Resolving the prisoners dilemma, where both parties plays their dominant strategy but are jointly better off than when they would have cooperated
Market players factoring in the future benefits of cooperation and the penalties imposed on cheating the cartel.
Also, appearing as “nice” and “fair” has benefits in future interactions with market players
Unconditional moves (trying to force a rival in a planned course of action) requires credible backing to impact the response of market players.
Strategic moves must be the first action to change a simultaneous game into a sequential game.
Deterrent (to not take and action) and compelling (to take a certain action) threats and promises
Warnings and assurances inform the other party of your preferred course of action, while threats and promises will be negative for the party issuing them. Threats and promises need to be observable for the other parties, otherwise their actions will not be impacted.
An action that can be changed will be seen as bluff without credible backing
Breaking a promise strategically, imagine a no negotiation with high jackers of planes. If the government attacks the terrorists after striking a deal and getting the hostages, this will deter future high jackers
Seemingly irrational players can issue threats and promises that a rational participant can’t make credibly, explaining efficacy of Trump and other populist politicians in part
Contracts their value being dependent on their enforcers being independent and capable
Cortez and William the Conqueror literally burning their ships to enforce commitment (and make desertion impossible) with their troops
Breaking up a large threat or promise in multiple smaller ones, making the binary risk of breaking up the agreement less, with making the future payments contingent on continued cooperation (and no formal cancellation date of the business relationship)
In zero sum games with two outcomes, the minimum of the maximum outcome for both players is the equilibrium outcome (and is also the maximum of the minimum)
The best way to surprise your enemy is to surprise yourself
Unpredictability is key to avoid being forced into game theory outcomes
Manipulation of rivals by making a bad outcome more likely, to make them more compelled to compromise
Better to fail spectacularly than marginally, and show you are at the edge of your abilities
Direction will be accurate but the level of intensity will be gamed by participants in polls, hampering moderate candidates
Voting sequence can influence the outcome of votes, with the preference for candidates leading to elimination of candidates in different sequences
The better a party can do without an agreement, the better its bargaining outcome will be. Also the higher the cost of waiting is for one party, the lower its willingness to walk away from (or postpone) negotiations will be.
The most patient side will get the larger part of the settlement, in proportion to its implied interest % versus the other side’s interest %
Look ahead and reason backward to figure out the logical steps, avoiding the slippery slope
The possibility of divorce makes it easier to enter into a marriage
Auction mechanisms, where the second best offer is paid to the lowest bidder, being as efficient as those were the lowest bidder gets the offer, since participants in the auction game their offers
Large market players leave declining markets earlier than other players due to their higher overhead costs that require higher revenues (basically the reversal of economies of scale effect).
Large parties need to compromise more, the exploitation of the great by the small, in political coalitions and cartels.
Loss leaders need to be relatively limited to be attractive to use in a price war
Tragedy of the commons can be addressed by pricing of externalities or by establishing property rights (which however impact income distributions)
Installing capacity beyond current requirements by the market leader signals a credible commitment to a price war, keeping out new entrants to the market
Renting instead of selling limited rights (like ground or taxi rights) gives an incentive to the government not to unduly increase the supply, since the value will reset at the end of every period based on the supply
The most popular slot machine per definition are not the ones with the best pay out ratios, given the incentives of casinos
The best way to surprise your enemy is to surprise yourself
Thinking Strategically: The Competitive Edge in Business, Politics, and Everyday Life is surprisingly relevant and full of insights for a book almost thirty years old. Despite the title, it is very much a book about game theory, and how, if one thinks through the actions of competitors full through rationally, current decisions can be inferred. Off course the work of Richard H. Thaler and Daniel Kahneman show that humans are far from this rational, still it is an interesting frame of mind.
The American Football metaphors used by Avinash K. Dixit go straight over my head, but for the rest this is highly readable and interesting.
Especially what makes commitments and threats credible (they must hurt the one issuing them) and the thinking around when one should, or should not, take the first step, is interesting. In a climate where irrationality is favoured, think of the unpredictability of Trump for instance, game theory does break down, but in general these are interesting insights in something I found quite esoteric initially during my MBA.
Quotes and thoughts:
It’s better to be a good strategist than a bad strategist
The first mover opens itself for strategic countering to other players in the market e.g. if the market leader bets on a certain product, the other market players can align themselves to an alternative
Sequential versus simultaneous interactions, in ignorance of other market players moves
Look ahead and reasoning back
In an even number of step negotiation 50/50 outcomes between two (equally powerful) parties are logical, while in uneven steps, it will be 1+n for the starting party and 1-n for the second party
If you have to take more risk, take them on the first serve
Dominant strategy: better in some circumstances and not worse in any, independent of your opponents
Eliminate dominated strategies sequentially to arrive at the best course of action (remove sequences of outcomes which have overall better alternatives available)
A two tiered bidding strategy to get majority control over a company, even if the blended rate of the offered share price is lower than an undifferentiated offer, can coerce shareholders to tender
Resolving the prisoners dilemma, where both parties plays their dominant strategy but are jointly better off than when they would have cooperated
Market players factoring in the future benefits of cooperation and the penalties imposed on cheating the cartel.
Also, appearing as “nice” and “fair” has benefits in future interactions with market players
Unconditional moves (trying to force a rival in a planned course of action) requires credible backing to impact the response of market players.
Strategic moves must be the first action to change a simultaneous game into a sequential game.
Deterrent (to not take and action) and compelling (to take a certain action) threats and promises
Warnings and assurances inform the other party of your preferred course of action, while threats and promises will be negative for the party issuing them. Threats and promises need to be observable for the other parties, otherwise their actions will not be impacted.
An action that can be changed will be seen as bluff without credible backing
Breaking a promise strategically, imagine a no negotiation with high jackers of planes. If the government attacks the terrorists after striking a deal and getting the hostages, this will deter future high jackers
Seemingly irrational players can issue threats and promises that a rational participant can’t make credibly, explaining efficacy of Trump and other populist politicians in part
Contracts their value being dependent on their enforcers being independent and capable
Cortez and William the Conqueror literally burning their ships to enforce commitment (and make desertion impossible) with their troops
Breaking up a large threat or promise in multiple smaller ones, making the binary risk of breaking up the agreement less, with making the future payments contingent on continued cooperation (and no formal cancellation date of the business relationship)
In zero sum games with two outcomes, the minimum of the maximum outcome for both players is the equilibrium outcome (and is also the maximum of the minimum)
The best way to surprise your enemy is to surprise yourself
Unpredictability is key to avoid being forced into game theory outcomes
Manipulation of rivals by making a bad outcome more likely, to make them more compelled to compromise
Better to fail spectacularly than marginally, and show you are at the edge of your abilities
Direction will be accurate but the level of intensity will be gamed by participants in polls, hampering moderate candidates
Voting sequence can influence the outcome of votes, with the preference for candidates leading to elimination of candidates in different sequences
The better a party can do without an agreement, the better its bargaining outcome will be. Also the higher the cost of waiting is for one party, the lower its willingness to walk away from (or postpone) negotiations will be.
The most patient side will get the larger part of the settlement, in proportion to its implied interest % versus the other side’s interest %
Look ahead and reason backward to figure out the logical steps, avoiding the slippery slope
The possibility of divorce makes it easier to enter into a marriage
Auction mechanisms, where the second best offer is paid to the lowest bidder, being as efficient as those were the lowest bidder gets the offer, since participants in the auction game their offers
Large market players leave declining markets earlier than other players due to their higher overhead costs that require higher revenues (basically the reversal of economies of scale effect).
Large parties need to compromise more, the exploitation of the great by the small, in political coalitions and cartels.
Loss leaders need to be relatively limited to be attractive to use in a price war
Tragedy of the commons can be addressed by pricing of externalities or by establishing property rights (which however impact income distributions)
Installing capacity beyond current requirements by the market leader signals a credible commitment to a price war, keeping out new entrants to the market
Renting instead of selling limited rights (like ground or taxi rights) gives an incentive to the government not to unduly increase the supply, since the value will reset at the end of every period based on the supply
The most popular slot machine per definition are not the ones with the best pay out ratios, given the incentives of casinos
April 5, 2011
This is how a book should be written.
It is a fantastic introduction to game theory for the intelligent layman. It covers strategic decision making for innumerable scenarios, including but not limited to: poker, political campaigns, takeover bids, business negotiations, baseball pitches, bargaining, labor relations, tax audits, and nuclear war. The authors strike the perfect blend of in-depth coverage of the technical topics, like Bayes theorem, with concrete examples illustrating the concepts. They avoid jargon as much as possible and deliver the meat of the matter. Sprinkled in like M&Ms in trail mix are humorous anecdotes and some hysterical quotes (with more than a few stemming from the fertile mind of Yogi Berra). I was so engrossed with the book that I failed to take the time to record all the funny quotes and stories; besides, there were too many to record anyway. They await your discovery.
Unfortunately, as you will learn after reading the book, the ideas you discover cannot help you gain an advantage over future adversaries. Why not? Because they will have read the book too. There is no strategic advantage to be gained, the price of admission has merely shifted.
Here are the most fundamental ideas heartlessly wrenched from a charming and intriguing book well worth your time:
Rules:
1. Look ahead and reason back.
2. If you have a dominant strategy, use it.
3. Eliminate any dominated strategies from consideration, and go on doing so successively.
4. Having exhausted the simple avenues of looking for dominant strategies or ruling out dominated ones, the next thing to do is to look for an equilibrium of the game.
There are 8 ways to make credible threats or promises:
1. Establish and use reputation
2. Write Ks
3. Cut off communication
a. Last will and testament
4. Burn bridges behind you
a. Cortes burned his ships when he landed in Mexico
5. Leave the outcome beyond your control
a. The doomsday device in Dr. Strangelove was set to automatically destroy the planet if the Soviet Union were attacked
6. Move in small steps
a. Purchase cocaine in small quantities and take delivery even if you want a lot
7. Develop credibility through teamwork
a. Alcoholics Anonymous, Roman army would kill deserters
8. Employ mandated negotiating agents
Min-Max theorem – in zero-sum games in which the players’ interests are strictly opposed, one player should attempt to minimize his opponent’s maximum payoff while his opponent attempts to maximize his own payoff. When they do, the mini-max and maxi-min are exactly equal. Neither player can improve his position, so there is an equilibrium. Employing your "best mix" strategy requires unpredictability to avoid letting your opponent catch on.
It is a fantastic introduction to game theory for the intelligent layman. It covers strategic decision making for innumerable scenarios, including but not limited to: poker, political campaigns, takeover bids, business negotiations, baseball pitches, bargaining, labor relations, tax audits, and nuclear war. The authors strike the perfect blend of in-depth coverage of the technical topics, like Bayes theorem, with concrete examples illustrating the concepts. They avoid jargon as much as possible and deliver the meat of the matter. Sprinkled in like M&Ms in trail mix are humorous anecdotes and some hysterical quotes (with more than a few stemming from the fertile mind of Yogi Berra). I was so engrossed with the book that I failed to take the time to record all the funny quotes and stories; besides, there were too many to record anyway. They await your discovery.
Unfortunately, as you will learn after reading the book, the ideas you discover cannot help you gain an advantage over future adversaries. Why not? Because they will have read the book too. There is no strategic advantage to be gained, the price of admission has merely shifted.
Here are the most fundamental ideas heartlessly wrenched from a charming and intriguing book well worth your time:
Rules:
1. Look ahead and reason back.
2. If you have a dominant strategy, use it.
3. Eliminate any dominated strategies from consideration, and go on doing so successively.
4. Having exhausted the simple avenues of looking for dominant strategies or ruling out dominated ones, the next thing to do is to look for an equilibrium of the game.
There are 8 ways to make credible threats or promises:
1. Establish and use reputation
2. Write Ks
3. Cut off communication
a. Last will and testament
4. Burn bridges behind you
a. Cortes burned his ships when he landed in Mexico
5. Leave the outcome beyond your control
a. The doomsday device in Dr. Strangelove was set to automatically destroy the planet if the Soviet Union were attacked
6. Move in small steps
a. Purchase cocaine in small quantities and take delivery even if you want a lot
7. Develop credibility through teamwork
a. Alcoholics Anonymous, Roman army would kill deserters
8. Employ mandated negotiating agents
Min-Max theorem – in zero-sum games in which the players’ interests are strictly opposed, one player should attempt to minimize his opponent’s maximum payoff while his opponent attempts to maximize his own payoff. When they do, the mini-max and maxi-min are exactly equal. Neither player can improve his position, so there is an equilibrium. Employing your "best mix" strategy requires unpredictability to avoid letting your opponent catch on.
March 19, 2015
It is a book to learn the game theory from basic.
This book is ideal as introduction to game theory.
Learning the game theory by using the game.
It is to incorporate all the basic essence of game theory.
This book is ideal as introduction to game theory.
Learning the game theory by using the game.
It is to incorporate all the basic essence of game theory.
June 22, 2010
Oh game theory! I agree with the fact that knowledge of how to play games matters but this book was more academic than mainstream. Economics is a dismal science though, and this book does not even make an effort examining moral implications of many games.
Things I learned:
- To improve the effectiveness of your backhand in tennis, improve your forehand so your opponent respects (and plays more) against your forehand.
- When you're #1 in the industry, let the competitors drive the innovation and imitate them when they are successful so you take less risk and protect your standing.
- Mix your strategies randomly to keep the opponent honest.
- Hostages' dilemma is often worse than prisoners' dilemma though both generally suck and require difficult resolutions. Why? It is hard to deter cheating.
- It takes a lot of effort to earn credibility.
- In unique situations (i.e. war battles), surprise yourself at the last minute to surprise your enemy.
- Brinkmanship saved the world from nuclear disaster but failed at Tiananmen Square.
- We're stuck with the QWERTY keyboard and racially non-integrated neighborhoods due to unkind equlibria. Many equilibria are also determined by fad.
- Voting sucks because no voting system exists in the world that can induce ALL voters to represent their honest views through their votes. Voting gets even worse for contests such as the Baseball Hall of Fame.
- Shrinking industries usually feature larger firms go out of business first because their costs are highest.
Things I learned:
- To improve the effectiveness of your backhand in tennis, improve your forehand so your opponent respects (and plays more) against your forehand.
- When you're #1 in the industry, let the competitors drive the innovation and imitate them when they are successful so you take less risk and protect your standing.
- Mix your strategies randomly to keep the opponent honest.
- Hostages' dilemma is often worse than prisoners' dilemma though both generally suck and require difficult resolutions. Why? It is hard to deter cheating.
- It takes a lot of effort to earn credibility.
- In unique situations (i.e. war battles), surprise yourself at the last minute to surprise your enemy.
- Brinkmanship saved the world from nuclear disaster but failed at Tiananmen Square.
- We're stuck with the QWERTY keyboard and racially non-integrated neighborhoods due to unkind equlibria. Many equilibria are also determined by fad.
- Voting sucks because no voting system exists in the world that can induce ALL voters to represent their honest views through their votes. Voting gets even worse for contests such as the Baseball Hall of Fame.
- Shrinking industries usually feature larger firms go out of business first because their costs are highest.
February 9, 2022
A few case studies in the book were exceedingly boring, and most of those concern 80's American politics. aside from that, I don't think this book is all that practical. Some strategies assume your opponent is also a rational robotic thinker, and that you have access to probabilities and data most people won't have in real life. But it's fun to daydream about being a hyper-genius anime protagonist outsmarting some buffoon while reading through the chapters.
December 9, 2018
This book should really be called an introduction to game theory. I certainly enjoyed it as a way to think about problems and reduce them to a polynomial equation that solves for a particular variable. You can take this a step further and find local minimum and maximum in any given function to find optimal solutions which is essentially what is most of modern machine learning. The hard part is getting an accurate function to define your problem which generally takes a lot of data. This book was written in 1991 before the massive adoption of machine learning to all things business. Those concepts still apply, but now we just have a lot more data.
Turning problems into a a mathematical representation takes the romance and human component out of solving problems. This eats my soul and also produces better outcomes. It takes things like rules and regulations and reduces them to probabilities and punishments. This leads one to think that rules don't need to be followed as long as the equation predicts a better outcome and the risk of rule enforcement is low enough to warrant breaking them. This math help define how to fight the cold war since there aren't any real rule enforces in a geopolitical scale.
So if you want to find the best solutions to problems that can be represented by equations and probabilities, this will be a great book to get you started. The equations for the problems presented in this book were pretty simple which is great for teaching by example. To be competitive today you will likely have to have much more data and much more accurate equations to define your problem space.
May the best math win.
Turning problems into a a mathematical representation takes the romance and human component out of solving problems. This eats my soul and also produces better outcomes. It takes things like rules and regulations and reduces them to probabilities and punishments. This leads one to think that rules don't need to be followed as long as the equation predicts a better outcome and the risk of rule enforcement is low enough to warrant breaking them. This math help define how to fight the cold war since there aren't any real rule enforces in a geopolitical scale.
So if you want to find the best solutions to problems that can be represented by equations and probabilities, this will be a great book to get you started. The equations for the problems presented in this book were pretty simple which is great for teaching by example. To be competitive today you will likely have to have much more data and much more accurate equations to define your problem space.
May the best math win.
July 30, 2016
A primer on game theory - it attempted to explain the main concepts in lay language, without going too much into the maths. Found portions difficult as some examples were drawn from baseball and american football, which I'm not familiar with. Still, there are many other interesting examples that will warp your brain. Some of the mathematical explanations were also beyond me. My main grouse with game theory is that it assumes that players are logical, which is apparently not true all of the time. Nonetheless, it does provide good frames for thinking about problems. Recommended if you're interested in game theory.
May 27, 2021
A pretty interesting overview of game theory and a wide variety of game theoretic methods. I think Schelling is probably a more engaging writer on game theory, but this might be more appealing if you're interested primarily in how game theory impacts business. That said, although I am not so interested in business, it was still worth reading.
July 1, 2024
La vibra que emana hace creer que se trata de un libro de autoayuda sobre cómo "ganarle a tus enemigos" y cosas por el estilo, pero la lectura resulta tanto más fría y cuadrada. Esto para bien como para mal. Del lado positivo, el tema es la teoría del juego, una corriente matemática focalizada en toma de decisiones, ramas consecuenciales y optimización de escenarios. Básicamente, si tienes un dilema y tres opciones para resolverlo, ¿cuál es la más optima? La teoría del juego depura los factores en valores numéricos y asigna la decisión con el valor más grande. El libro está compuesto mayormente por ejemplos donde se puede aplicar la teoría del juego de manera matemática. No se meterá en cuestiones psicológicas ni sociológicas: repasará casos donde se puedan asignar valores muy concretos para buscarse la mejor solución. Los problemas no te dan la impresión de ser cotidianos, sino problemas matemáticos que se disfrazan de cotidianidad. Entendí esto cuando se llegaba a situaciones de juegos 1-0 (donde lo que uno gana es lo que el otro pierde) en que ambos jugadores tenían estrategias igual de efectivas, lo que los llevaba a un loop de pensar en que pensaría el otro que pensará uno que pensará el otro y así ad infinitum (como un número con decimales infinitos). La solución a esto es: al carajo, échalo al azar, así ni tú ni él verán venir tu jugada. Esa admisión de entropía es lo que salva al libro de ser un mero aparato de autoayuda empresarial, cuya audiencia tiende a buscar sentido sin importar cuan artificioso sea. Tampoco es que sean matemáticas difíciles (de ser así no le habría entendido xd), son casos alterados para poder demostrar los conceptos más básicos y simplificados y reconoce que en la vida las situaciones son muchísimo más complejas, por lo que se requeriría entrar a las matemáticas ahora sí complicadas (lo cual no es el objetivo del libro). Como queda, es un entretenido libro ligeramente sociopático que asume a los humanos como calculadoras que siempre buscarán y encontrarán la mejor solución. (Un libro donde el autor se queja de que Indiana Jones debió darle de beber el Santo Grial primero a su padre agonizante por si era el incorrecto y así, mínimo, Harrison Ford viviría en vez de morir ambos.) Pero atribuyo ligereza a su sociopatía, porque aunque los capítulos devienen en buscar la mejor solución sin importar su moralidad, este advierte que eso nos llevaría a un mundo autodestructivo. Se deben considerar las paranoias de la desconfianza y el egoismo para diseñar un sistema transforme nuestros peores instintos en acciones que beneficien al prójimo. El mal existe: hay que domarlo.
Lo malo: que asume a los humanos como calculadoras xd. Al brincarse las cuestiones psicológicas que complejizaría la información (más allá de factores reductibles para los casos), uno siente que la información a presentar se agotó antes de cerrar las cuatroscientas páginas, tornándose bastante cansado por las últimas cien, cuando varios ejemplos ya se sienten repetitivos. Además, la prosa no es la más clara (bastante robótica, pero eso me gusta).
Recomendado como introducción a la teoría del juego y sus posibles aplicaciones en la realidad (sin esperar las mejores herramientas para que uno las ejecute). Yo lo tomé así y me divertí bastante. Hará falta nutrirse con lecturas más profundas (siguen Schelling y Neumann).
Lo malo: que asume a los humanos como calculadoras xd. Al brincarse las cuestiones psicológicas que complejizaría la información (más allá de factores reductibles para los casos), uno siente que la información a presentar se agotó antes de cerrar las cuatroscientas páginas, tornándose bastante cansado por las últimas cien, cuando varios ejemplos ya se sienten repetitivos. Además, la prosa no es la más clara (bastante robótica, pero eso me gusta).
Recomendado como introducción a la teoría del juego y sus posibles aplicaciones en la realidad (sin esperar las mejores herramientas para que uno las ejecute). Yo lo tomé así y me divertí bastante. Hará falta nutrirse con lecturas más profundas (siguen Schelling y Neumann).
August 12, 2011
It's not one of those 'motivation' books, the caption for the book is misleading. Application of strategies in all walks of life-sports, casinos, business, politics, and everyday life-using case studies are presented in this book. Although majority of the case studies are explained based on rudimentary concepts in game theory, there are instances of using probability and psychology concepts as well. Overall, a very good no non-sense read, which is not very thought provoking but interesting in most of the pages.
On the negative side, the concepts in case studies are repeated in many instances, notwithstanding the fact that the background story of every case study is unique. About around five case studies out of more than thirty are unique in terms of idea and complexity.
On the negative side, the concepts in case studies are repeated in many instances, notwithstanding the fact that the background story of every case study is unique. About around five case studies out of more than thirty are unique in terms of idea and complexity.
January 24, 2016
الكتاب بيربط نظرية الألعاب بالواقع المجتمعي والمواقف التاريخية والسياسية . . مع الإعتراف بعدم اكتمال النظرية حتى الآن وتكاملها.
نظرية الألعاب هدفها تحديد الإستراتيجيات السليمة الواجب اتباعها ، كيفية اختيار الاستراتيجية الغير مسيطر عليها والتي لا تتوقف على قرارات الغير . . كما في مثال مأزق السجين الشهير.
نظرية الألعاب على المستوى الإقتصادي وحساب المنافع بتصبح أكثر تعقيدا خصوصا لو تدخل في القرار حساب المنافع وجوانب أخلاقية.
الكتاب منقسم لمقدمة بتوضح التصرف الاستراتيجي.
وبعد ذلك عرض لعشر قصص واقعية عن أمثلة الإستراتيجيات المختلفة التي اتبعها لاعبين ومناضلين وقادة عسكريين
ثم استرسال في عرض نظرية الألعاب بصورة متميزة عن طرق ألعاب ومشاركة من القارئ لاختيار الاستراتيجيات الصحيحة.
نظرية الألعاب هدفها تحديد الإستراتيجيات السليمة الواجب اتباعها ، كيفية اختيار الاستراتيجية الغير مسيطر عليها والتي لا تتوقف على قرارات الغير . . كما في مثال مأزق السجين الشهير.
نظرية الألعاب على المستوى الإقتصادي وحساب المنافع بتصبح أكثر تعقيدا خصوصا لو تدخل في القرار حساب المنافع وجوانب أخلاقية.
الكتاب منقسم لمقدمة بتوضح التصرف الاستراتيجي.
وبعد ذلك عرض لعشر قصص واقعية عن أمثلة الإستراتيجيات المختلفة التي اتبعها لاعبين ومناضلين وقادة عسكريين
ثم استرسال في عرض نظرية الألعاب بصورة متميزة عن طرق ألعاب ومشاركة من القارئ لاختيار الاستراتيجيات الصحيحة.
June 8, 2016
The book focuses on game theory as strategy. The overview of the game theories is decent. Unfortunately, the authors attempt to convert everything to a quantifiable value that can then be run through standard formulas. Personally, I think a lot of the quantification is highly qualitative and therefore isn't quite as straightforward as it's made out to be in the book.
June 27, 2016
A fantastic read! Inundated with examples of politics, sports, and business. Relevant case studies are provided post chapters. An active mind is required while reading the book. Definitely a mind expanding book!
April 29, 2014
Fantastic introduction to game theory. I would highly recommend this book to everyone I've ever met.
December 2, 2023
Nếu chịu động não và suy nghĩ kỹ hơn những ví dụ trong sách thì có lẽ rating sẽ cao hơn :D
This entire review has been hidden because of spoilers.
January 10, 2025
This book is trying not to be a textbook but still cover the material in a comprehensive way, it seems to fail in doing both. Too technical for a fun read, and too scattered for a textbook. I might get back to some chapters if they become relevant in the context of a course, but I don’t recommend this to the interested reader without a clear need for this particular book. I’m sure there are better ones out there.
April 12, 2020
Not what I was expecting but some fun mental exercises nonetheless.
September 4, 2023
Quá dài để trở nên hấp dẫn.
January 6, 2024
A good almanac on Game Theory and its associated jargon, without the maths and formulae. An interesting read.
Read
August 17, 2024DNF
March 12, 2025
Too many case studies and anecdotes. Not well suited for audiobook as there’s a lot of tables to review, and they’re just read out by column and row. Very hard to follow in audio format.
September 5, 2018
A very interesting, quick, and easy read. The only dry section was about 20 pages on politics, of the ≈ 376 pages; somewhere around 280. The politics section, in my opinion, is more about winning for the sake of winning and less about winning with meaning, principles, or a philosophy in mind; basically, become as bland and ordinary as possible, more ordinary than the people you are running against, and you will be more likely to win that election- that is a major waste of time and a loss in my book - AKA sellout to win, take positions based on polls, etc. But, in game theory, it is all about winning and not always about winning in the most meaningful way, just how you are most likely to win, which can feel empty; there are caveats, the book does recommend not to be "cutthroat" when you are competing against somebody where you may be able to cooperate with them in the future for mutual benefits, ect, ect..
A lot of the book sounds like logical or common sense, but some of it is helpful in getting what you strategically desire, such as making the deal a little sweeter for your competitor; for example, in a boardgame, don't just warn a competitor that you will attack one of there important areas if they take a game piece you desire, sweeten the deal by promising that you will not take a particular game piece that is strategically important to them...but be sure to betray them before they betray you near the end of the game, in order to win in a win-lose zero sum situation. However, if there is a fixed number of turns in a game, betray your opponent immediately, because betrayal has the biggest payoff in a "fixed turns" game, but you are not likely to keep friends or acquaintances this way, this is only how you act when you will never compete against this opponent again; if you treat a "future opponent" this way, you will have dealt yourself a terrible hand before the beginning of the "future game."
Definitely a fun read, more fun than I expected. The exercises at the end of chapters are fun and exciting when you choose the best strategy [according to the authors] based on what information you have or your position in a game.
A lot of the book sounds like logical or common sense, but some of it is helpful in getting what you strategically desire, such as making the deal a little sweeter for your competitor; for example, in a boardgame, don't just warn a competitor that you will attack one of there important areas if they take a game piece you desire, sweeten the deal by promising that you will not take a particular game piece that is strategically important to them...but be sure to betray them before they betray you near the end of the game, in order to win in a win-lose zero sum situation. However, if there is a fixed number of turns in a game, betray your opponent immediately, because betrayal has the biggest payoff in a "fixed turns" game, but you are not likely to keep friends or acquaintances this way, this is only how you act when you will never compete against this opponent again; if you treat a "future opponent" this way, you will have dealt yourself a terrible hand before the beginning of the "future game."
Definitely a fun read, more fun than I expected. The exercises at the end of chapters are fun and exciting when you choose the best strategy [according to the authors] based on what information you have or your position in a game.
January 9, 2019
I decided to read this book after we started the "Game Theory" topic at university. I started with listening Audible version but later understood that, for this book, illustrations are important. My main conclusion is that the book is a great introduction to the Game Theory.
The book provides us with a good overview of strategic principles. One of its advantages is that the authors give a lot of examples from various industries and life situations, which helps to better understand the theory. The examples include cases from businesses and history.
Everybody uses strategies, and sometimes we just do not even think of it. The book gave me the opportunity to take a new look at some of my life experiences including even relationships with friends, family, and myself. All of us make decisions every day, and this book is aimed to improve our decision-making by making us able to see the strategy and take the role of the opponent.
This book is valuable because of the approach authors use to explain it: the case studies after each module. Even though this is a very practical book and all the basic concepts of Game Theory are well-explained even without formulas, as for me, the book lacks some numbers and math.
The book provides us with a good overview of strategic principles. One of its advantages is that the authors give a lot of examples from various industries and life situations, which helps to better understand the theory. The examples include cases from businesses and history.
Everybody uses strategies, and sometimes we just do not even think of it. The book gave me the opportunity to take a new look at some of my life experiences including even relationships with friends, family, and myself. All of us make decisions every day, and this book is aimed to improve our decision-making by making us able to see the strategy and take the role of the opponent.
This book is valuable because of the approach authors use to explain it: the case studies after each module. Even though this is a very practical book and all the basic concepts of Game Theory are well-explained even without formulas, as for me, the book lacks some numbers and math.
September 17, 2020
A charming and enjoyable introduction to game theory and its practical applications in business and politics.
Written with a suitably low expectation of prior knowledge, the plain language made grasping some of these otherwise difficult concepts that much easier. Once you get a hold of some of these ideas, its impossible not to see them EVERYWHERE in ordinary life.
Key ideas included recognizing when you're playing "simultaneous move games" as opposed to "sequential move games." In sequential move "games", reason backwards to determine what you should do in any given situation. In simultaneous move "games", look out for what your dominant or most advantageous play is, and do that. But try to minimise the playing of your weaker position. Or you could also strengthen your weakness.
And of course, the authors talk about the Prisoner's Dilemma, Nash Equilibrium and all that other good stuff. Read the book, okay! It will be worth your time.
Written with a suitably low expectation of prior knowledge, the plain language made grasping some of these otherwise difficult concepts that much easier. Once you get a hold of some of these ideas, its impossible not to see them EVERYWHERE in ordinary life.
Key ideas included recognizing when you're playing "simultaneous move games" as opposed to "sequential move games." In sequential move "games", reason backwards to determine what you should do in any given situation. In simultaneous move "games", look out for what your dominant or most advantageous play is, and do that. But try to minimise the playing of your weaker position. Or you could also strengthen your weakness.
And of course, the authors talk about the Prisoner's Dilemma, Nash Equilibrium and all that other good stuff. Read the book, okay! It will be worth your time.
July 4, 2019
This is a qualified 4-star. The examples are somewhat dated as the book was written in 1990, and they do have a decidedly American flavour to them. This feels like a book written by people at Harvard business school, *for* people at Harvard business school. Not that that's necessarily a bad thing.
The major take aways:
- Look to the last action and reason backwards. This will help you recognise and avoid forced moved.
- There are differences in outcome depending on whether the game you are playing is one where players move simultaneously, or sequentially.
- Look for dominant strategies. If you have one, use it. If they have one, use your best move presuming they will use it (they'd be stupid not to).
- Collective action problems (of which the prisoner's dilemma is a subset) show up everywhere. Learn how to recognise them in your life and be the person implementing the enforceable agreement to resolve it, if possible.
Glad I read this but wouldn't read it again. Would definitely use it as a reference though.
The major take aways:
- Look to the last action and reason backwards. This will help you recognise and avoid forced moved.
- There are differences in outcome depending on whether the game you are playing is one where players move simultaneously, or sequentially.
- Look for dominant strategies. If you have one, use it. If they have one, use your best move presuming they will use it (they'd be stupid not to).
- Collective action problems (of which the prisoner's dilemma is a subset) show up everywhere. Learn how to recognise them in your life and be the person implementing the enforceable agreement to resolve it, if possible.
Glad I read this but wouldn't read it again. Would definitely use it as a reference though.
June 27, 2010
It should have been titled the same but with the prefix: "A General Introduction to"-
Sometimes, to cram load of examples into one book doesn't make it readable - but irritating, to me, anyway.
Another thing that disappointed me with this book is that it constantly trying to get around the math without acknowledging it directly and the result is excessive use of words over a simple matter, and to put things worst - there is not even an appendix that explores the far reaches of the subject to those who want to do so (contra e.g. - I think that Simon Singh and Mario Livio did just that beautifully - try them yourself by reading Fermat last theorem of Singh and Livio's Golden Ration).
The book may be entertaining to some, especially if you tend towards looking at it as a pure enterteinment and not as something that supposed to be something like a science.
Sometimes, to cram load of examples into one book doesn't make it readable - but irritating, to me, anyway.
Another thing that disappointed me with this book is that it constantly trying to get around the math without acknowledging it directly and the result is excessive use of words over a simple matter, and to put things worst - there is not even an appendix that explores the far reaches of the subject to those who want to do so (contra e.g. - I think that Simon Singh and Mario Livio did just that beautifully - try them yourself by reading Fermat last theorem of Singh and Livio's Golden Ration).
The book may be entertaining to some, especially if you tend towards looking at it as a pure enterteinment and not as something that supposed to be something like a science.
June 23, 2012
Nice introduction to game theory. Enaging and easy to read, though not as deep as David M. Kreps'Game Theory and Economic Modelling, but still very insightful. Ideal for general readers or undergraduate students in their first years of study in the social sciences.
July 4, 2022
It's not that easy to pick an introductory book to game theory. For me this was a success, because it demonstrated how deep strategic thinking can go and did it in a simple manner.
The book does not use any math, all the explanations are based on reasoning and logic. There are some great tools in there like thinking forward/planning backward, dominant strategies, payoff matrices, charts, etc.
4 stars only because some of the examples are dated. I would have preferred a more recent book.
The book does not use any math, all the explanations are based on reasoning and logic. There are some great tools in there like thinking forward/planning backward, dominant strategies, payoff matrices, charts, etc.
4 stars only because some of the examples are dated. I would have preferred a more recent book.
June 9, 2020
During this pandemic, I decided to enter the world of game theory. As a lawyer by training, numbers do not come to me naturally; however, there is great potential in incorporating them into my practice. Broadly defined, game theory is the mathematical analysis of decision making. Humans make decisions every day, few humans make strategic decisions every day. Being one of the latter is a lot more advantageous than being one of the former. Success lies with those that make the best decisions. How to make the best decisions? Through strategy.
There are many strategies, choosing the best one requires determination, skill, and vision. Generally, strategies are either dominating or dominated. In most cases, the dominating strategy is better than the dominated strategy; nonetheless, there are instances where our dominating strategy can be beaten by the dominating strategy of our adversaries. Game theory offers a valuable framework to analyze the impact of your decisions and those of your adversaries.
One of the main tenets of game theory is to think forward and reason backward. One should be able to schematize all probable decisions in a game from beginning to end and analyze the advantages and disadvantages of every decision. The purpose is to analyze the probable outcome of the game considering your decisions and those of your adversary.
Common sense indicates that we should be making the best decisions all the time, maximizing our outcomes. Yet, our best decisions may collide with the best decisions of our adversaries. For instance, oil-producing countries might assess that maximizing their oil outputs is the best strategy to increase profits. However, there are many oil-producing countries that are using the same thought process, they all coexist in a global competitive market. In this case, if all parties decide to opt for their best strategy (maximize outputs), everyone would end up worse off (lower profits). The best scenario for everyone would be to commit to a lower output to sustain higher oil prices. This would require negotiations between parties where each one commits to honoring any agreements. There is always the possibility of cheating. Sometimes cheating in certain situations is a dominating strategy, the problem is the shattering of trust for future agreements.
It is possible that your adversaries are also using a game theory framework to predict your strategies; a tennis player might know that given his/her weak backhand, the server will always aim for his/her backhand (dominating strategy). This player might secretly train his backhand and beat the dominating strategy of the server. In this case, the server should predict this possibility and must come up with a scheme that makes the use of his dominating strategy as unpredictably as possible.
Another important factor is the credibility of your threats or promises to use your dominating strategy given its potential costs. For example, the use of nuclear weapons as a response to an aggression would lead to large number of deaths and destruction. If you want your threats (or promises) to be credible you must either have the will to execute them or leave their execution to other factors (chance, unpredictability, third party decision). Having last thoughts before “pressing the nuclear buttons” might impede the execution of your dominating strategy, your credibility to use them in the future would be lower. During the Cuba Missile Crisis, Kennedy stated how the use of nuclear weapons was extremely high (almost irreversible), this implied that the threat to use these weapons had to be credible enough to dissuade the Soviet Union from going further with their strategy. The essence of the brinkmanship mechanism is to create a risk that is sufficiently intolerable for your adversary, influence the other’s actions by altering his expectations.
Many dominating strategies must be sustained over a period of time in order to get its full results. A union should sustain a strike for an X period of time if it deems that the benefits are worth it. On the other hand, the company should determine if this strike is worth prolonging or stopping earlier to avoid decreases in profits. The party most able to sustain the costs over time will be the winning one. A similar example is the U.S. involvement in the Vietnam War. It appeared that after 1968, the U.S. had gone so deep into this conflict that prolonging it further would not represent “higher costs”, a surrender would be a lot more “costly”. North Vietnam assumed its victory at a very high cost.
“Thinking Strategically” is a phenomenal book for those interested in acquiring a more strategic mindset. As one of its critics stated, it is Machiavelli updated to our times. Many consider Machiavelli’s texts as guides on how to be a ruthless strategist by describing a pessimistic outlook on power and business. This erroneous thinking has led to centuries of misunderstanding of his philosophy. Machiavellianism should be seen as a guide on how to perceive these “ruthless” behaviors upheld by your adversaries. In this sense, game theory (and this book in particular) builds off from this idea: analyze your adversary and his decisions, they may have a lot to say about you and your decisions.
There are many strategies, choosing the best one requires determination, skill, and vision. Generally, strategies are either dominating or dominated. In most cases, the dominating strategy is better than the dominated strategy; nonetheless, there are instances where our dominating strategy can be beaten by the dominating strategy of our adversaries. Game theory offers a valuable framework to analyze the impact of your decisions and those of your adversaries.
One of the main tenets of game theory is to think forward and reason backward. One should be able to schematize all probable decisions in a game from beginning to end and analyze the advantages and disadvantages of every decision. The purpose is to analyze the probable outcome of the game considering your decisions and those of your adversary.
Common sense indicates that we should be making the best decisions all the time, maximizing our outcomes. Yet, our best decisions may collide with the best decisions of our adversaries. For instance, oil-producing countries might assess that maximizing their oil outputs is the best strategy to increase profits. However, there are many oil-producing countries that are using the same thought process, they all coexist in a global competitive market. In this case, if all parties decide to opt for their best strategy (maximize outputs), everyone would end up worse off (lower profits). The best scenario for everyone would be to commit to a lower output to sustain higher oil prices. This would require negotiations between parties where each one commits to honoring any agreements. There is always the possibility of cheating. Sometimes cheating in certain situations is a dominating strategy, the problem is the shattering of trust for future agreements.
It is possible that your adversaries are also using a game theory framework to predict your strategies; a tennis player might know that given his/her weak backhand, the server will always aim for his/her backhand (dominating strategy). This player might secretly train his backhand and beat the dominating strategy of the server. In this case, the server should predict this possibility and must come up with a scheme that makes the use of his dominating strategy as unpredictably as possible.
Another important factor is the credibility of your threats or promises to use your dominating strategy given its potential costs. For example, the use of nuclear weapons as a response to an aggression would lead to large number of deaths and destruction. If you want your threats (or promises) to be credible you must either have the will to execute them or leave their execution to other factors (chance, unpredictability, third party decision). Having last thoughts before “pressing the nuclear buttons” might impede the execution of your dominating strategy, your credibility to use them in the future would be lower. During the Cuba Missile Crisis, Kennedy stated how the use of nuclear weapons was extremely high (almost irreversible), this implied that the threat to use these weapons had to be credible enough to dissuade the Soviet Union from going further with their strategy. The essence of the brinkmanship mechanism is to create a risk that is sufficiently intolerable for your adversary, influence the other’s actions by altering his expectations.
Many dominating strategies must be sustained over a period of time in order to get its full results. A union should sustain a strike for an X period of time if it deems that the benefits are worth it. On the other hand, the company should determine if this strike is worth prolonging or stopping earlier to avoid decreases in profits. The party most able to sustain the costs over time will be the winning one. A similar example is the U.S. involvement in the Vietnam War. It appeared that after 1968, the U.S. had gone so deep into this conflict that prolonging it further would not represent “higher costs”, a surrender would be a lot more “costly”. North Vietnam assumed its victory at a very high cost.
“Thinking Strategically” is a phenomenal book for those interested in acquiring a more strategic mindset. As one of its critics stated, it is Machiavelli updated to our times. Many consider Machiavelli’s texts as guides on how to be a ruthless strategist by describing a pessimistic outlook on power and business. This erroneous thinking has led to centuries of misunderstanding of his philosophy. Machiavellianism should be seen as a guide on how to perceive these “ruthless” behaviors upheld by your adversaries. In this sense, game theory (and this book in particular) builds off from this idea: analyze your adversary and his decisions, they may have a lot to say about you and your decisions.
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