I think game theory, esp zero sum games, chicken, and prisoners dilemma help explain situations well (i.e. nuclear warface and arms races in general), especially traps to avoid like a sunk cost fallacy. However they are often not applicable for a practical optimal strategy in real life.
Quotes/Notes:
- "No, no,’ he said. ‘Chess is not a game. Chess is a well-defined form of computation. You may not be able to work out the answers, but in theory there must be a solution, a right procedure in any position. Now, real games,’ he said, ‘are not like that at all. Real life is not like that. Real life consists of bluffing, of little tactics of deception, of asking yourself what is the other man going to think I mean to do. And that is what games are about in my theory."
- "A game is a conflict situation where one must make a choice knowing that others are making choices too. And the outcome of the conflict will be determined in some prescribed way by all the choices made." ... "Von Neumann wondered if there is always a rarional way to play a game, particularly one with much bluffing and second guessing." ... "The mutual second guessing in games like poker invokes potentially infinite chains of reasoning. It was not obvious that rarional players would ever come to a definite conclusion of how to play."
- "Von Neumann demonstrated mathematically that there is always a rational course of action for games with two players. Provided their interests are completely opposed. This is called the minimax theorem."
- Zero sum games, prisoners dilemma. "The prisoners dilemma is apt to turn up anywhere a conflict of interests exist."
- "Einsteins mind was slower and contemplative. He would think about something for years. Johnny's mind was just the opposite. It was lightning quick, stunningly fast. If you gave him a problem he either solved it right away or not at all. If he has to think about it a long time and it bored him, his interest began to wonder. And Johnny's mind would not shine unless whatever he was working on has his undivided attention."
- "You don't have to be responsible for the world that you're in."
- "In the late 1920s, Von Neumann was already working on game theory and he would spend much of the last years of his life considering how a mind of sorts might be embodied in the relays and circuits of a computer."
- "'You must see that in a sense all science, all human thought, is a form of play.'... other animals play only while young.' ... to prepare himself for long term strategies and plans. Game theory is not about playing as usually understood it is about conflict amongst rational but distracting beings."
- "Good poker players do not simply play the odds, they take into account the conclusions other players will draw from their actions, and sometimes try to deceive the other players. It was Von Neuman's genius to see that this devious way of playing was both rational and amenable to rigorous analysis." Though he was not great at poker.
- "It is one thing to prove that a best strategy exists, but it is quite another to do all the calculation and produce the strategy." Games as trees vs tables
- Minimax theorem: 'you know the best you can expect is to avoid the worst.'
- "We have all listened to Monday-morning quarterbacks who tell how they would have played the game had they been in charge... there is one rule implicit in such free frantasizing: you can't change the other team's strategy....if you could choose the imposing teams strategy you could sabotage their play, thats not fair. Nash's approach to non-cooperative games emphasizes equilibrium points. These are outcomes where the players have no regrets. Hold a post mortem analysis after the game. Go to each player in turn and ask him if he would have done things any differently given how the other players played. If everybody is happy with the way they played, then that outcome is an equilibrium point."
- "The advantage of a surprise attack was appreciated in the most ancient writings on war. The bomb raised the possibility of a surprise attack winning not just the battle, but the war.... Von Neumann wrote 'in the past, if the enemy came out with a particularly brilliant new trick, then you just has to take your losses until you had developed the counter measures which may have taken weeks or months. The period of one month is probably reasonable for a very brilliantly performed counter-counter move. This duration is now much too long, and the losses you have to take during this period could be quite decisive. The difficulty with atomic weapons, and especially missile carried atomic weapons, will be that they can decide a war... consequentially, the nature of technical surprise will be different from what it was before. It will not be sufficient to know the enemy has only 50 possible tricks and that you can counter every one of them, but you must also invent some system of being able to counter them practically at the instant they occur."
- [in repeated prisoners dilemma] tit for tat: "Cooperate on the first round, then do whatever the other players did on the previous round." ... "a strategy that is too eager to cooperate often gets clobbered. Tit for tat is also provocable, it defects in response to defection by the other strategy." ... "just as important is tit for tat's forgiveness." ... "that the winning strategy was nice and provocable was no suprise...[the surprise was that] tit for tat was simple." ... "by making its threat as simple as possible, tit for tat ensures that the maximum number of responsive strategies will understand it." ... "another important quality for tit for tat is that it doesnt have to be kept a secret." ... "When faced with tit for tat, one can do no better than cooperate with it." One potentially more optimal strategy tests to see if its an all cooperate opponent, but otherwise tit for tat (not necessaily optimal elsewhere as a completely submissive strategy isn't common.
- "No strategy is good or bad out of context."
- Repeat games led to predator and prey cycles, tit for tat stabilized longer term. However tit for tat can enable endless wars depending on history...
- US/scientists thought that Germany was close to developing an atom bomb so they thought it was best to invent it first.
- "It's a matter of personalities, group psychology, and luck, not game theory. Rationality has nothing to do with it." [In a protracted strike].
- "the game [prisoners dilemma] demonstrates just what it was intended to: namely that individual interests can overturn the common good."
- "The only satisfying solution to the prisoners dilemma is to avoid prisoners dilemmas."