Santa brought me a textbook on game theory called Game Theory: Analysis of Conflict (Roger B. Myerson, Harvard, 1991) that I just cracked open this weekend. I bumped into some pretty serious calculus on page seven and am going to have to re-up on sets, vectors, functions and limits before I get much more out of this book. That’s kind of a downer (because of a lack of time) but also very exciting.
At any rate, those first six pages contain more than a few pithy sentences that sum up why I’ve gotten so excited about game theory and why it’s so applicable to the future of organization design (and, yes, even what some might call “social media marketing” ;-).
Here are a few favorites so far (that will also serve as context for some forthcoming thoughts):
“Game theory can be defined as the study of mathematical models of conflict and cooperation between intelligent rational decision-makers” (page 1)
“Much of the appeal and promise of game theory is derived from its position in the mathematical foundations of the social sciences.” (page 1)
“In the language of game theory, a ‘game’ refers to any social situation involving two or more individuals.” (page 2)
“When we analyze a game…we saythat a player in the game is “intelligent” if he knows everything that we know about the game and he can make any inferences about the situation that we can make [as social scientists]” (page 4)
re: software, this quote in particular says a lot about a) the benefits of simplicity/obvious affordances and b) behaviors in complex UX
“If a theory predicts that some individuals will be systematically fooled or led into making costly mistakes, then this theory will tend to lose its validity when these individuals learn to better understand the situation. The importance of game theory in the social sciences is largely derived from this fact.” (page 5)
That one sums up that last 10 years of Cluetrain-ish blogosphere hand-wringing in about 50 words, doesn’t it?
“Why should I expect that any simple quantitative model can give a reasonable description of people’s behavior? The fundamental results of decision theory directly address this question, by showing that any decision-maker who satisfies certain intuitive axioms should always behave so as to maximize the mathematical expected value of some utility function, with respect to some subjective probability distribution. That is, any rational decision-maker’s behavior should be describable by a ‘utility function’, which gives a quantitative characterization of his preferences for outcomes or prizes, and a ‘subjective probablity distribution’, which characterizes his beliefs about all relevant unknown factors.”
