Sunday, September 9, 2012

Thoughts around game theory

I had another thought around my post yesterday: In a perpetual game (a game that does not have a finite number of moves — which is more like real life), do you know what the best playing tactic is?

It's called tit for tat, and it states that you play the move your opponent played in the previous round. So, if your opponent defected in the previous round, you defect in the current round, to teach him a lesson. If he trusted, you trust. and on the game goes...

But there is an inevitability to the perpetual "real-life-family-business" game. At some point, after rounds of tit for tat, you will become exhausted and worn out from calculating your every step and move. Weary and tired, a possible end to the game will start looming on the horizon. When that happens then mathematical theory teaches us that the best tactic at that point is to always defect (it's called the Nash Equilibrium), and we know where that will lead us to...

I guess what I am saying is: play the trust card for as long as you can hold out — fight for it. Just remember that once you decide to switch tactics, once you move to a tit for tat game, there is an inevitability that you will no longer be able to ignore...


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