L2-MHG #02 Game Theory and the Game of Life

In studying the life sciences, researchers and scientists have been interested in trying to better understand how things work. That, of course, is the whole purpose of science.

Two of the big issues are selfishness and co-operation because survival against the odds, in ever-changing environments, is the name of the game of life.

Whether at the genetic level, the cellular level or at the level of the organism the big survival questions of any day and any situation are, “Do I look after #1?” or “Do I look after the others?”.

Game Theory is valuable because it offers some interesting and amazing insights–many are counter-intuitive or counter-cultural to our historical way of looking at things. In Level Two we will take our time to study Game Theory and become used to applying it in practise. I personally find it one of the most useful and interesting strategies I have ever learnt.

“In the world of Game Theory there exists no mercy or compassion, only self-interest. Survival to the next game is always the BIG imperative. Most people care soley about their own self-interests and everyone else in the game knows and accepts this as reality. In the world of game theory your boss would never give you a raise because “that would be a nice thing to do”. You get your raise only if you can show that it is in her interests to give you more money”.
– James Miller Game Theory at Work 

So, in gameworld, in the game of life, there is no ‘Christian charity’ or ‘Islamic brotherly love’. There is no Buddhist compassion, no religious self-sacrifice or martyrdom. There is only the hyper-competitive, all-against-all environment with winners and losers at the end of each day.

However (and here’s the interesting part), it turns out that–even when everyone acts totally ruthlessly and selfishly and all are competitive to the extreme–the cold, hard logic of game theory often dictates that selfish people are better off co-operating and that it is strategically superior to even treat each other with loyalty and respect.

Some of the insights from this training in game theory are:

• Why you never hire someone too eager to work for you

• Why you should place less trust in smokers

• Why many people in business exhibit honesty, not because they are moral but because they are greedy

• Why eliminating choices can increase the payoff

• Why burning money can increase your wealth

• Why exposing yourself to possible humiliation can increase your negotiating strength when seeking a raise.

So Level Two training is not about fuzzy and fluffy power chants and ‘balancing life and work and family’, nor is it about inspiring you to be more ‘caring’ etc etc. This is about how to out-strategise, or at least keep up with, competitors in and out of your company, career and social environment.

In all these environments, one of the most interesting things that humans do is to compete with one another. Not understanding game theory puts you at a tactical disadvantage against those who do understand game theory.

At the end of the day, this training and exploration of game theory is about the study of conflict. It serves to illuminate how rational, self-interested people struggle against each other and the environment for supremacy and for survival.

For those studying leadership, these insights are also interesting and fun to think about.

DFQ #02:
Cut and paste the most interesting sentence form this lesson …