Manuel Sarmiento

One of my favorite days of class was when we discussed Game Theory. Considered as the study of social situations, game theory comes down to trying to figure out what the other player is thinking. By predicting what the other person will do, he or she can make a decision that will reap the most benefit. Therefore, it becomes a test of wits as one player tries to outsmart the other. Whoever can successfully predict his opponent’s move and act accordingly to counter his foe will always win. Therefore, I want to show you some fascinating examples of people applying game theory.

To start, I want to show you this video.

In the video, we get a situation that is very similar to that of the Prisoner’s dilemma in which it is better for both to split the money but it is not expected of them since they do not trust each other. By bluffing his opponent into choosing an option, the man on the right successfully predicted his opponent’s move and acted accordingly. Although he could have been greedy and chosen steal knowing that his opponent was going to go with split, the man decided not to. His goal from the start was to share the money with his adversary and successfully accomplished it using game theory.

Another game where game theory is essential for success is poker. The player has two options when considering his opponent’s hand. He might have an actual hand that might win or he might be lying and trying to deceive you into believing he has a strong hand. No compromise can be made like in the previous example so self-preservation is a key.

A good example of game theory in action in poker is the video below:

The protagonist assumed early on to determine what cards in the flop would best his hand. That is considered game theory since one of the player’s tried to predict his opponent’s course of action for the round. He later changed his game plan once he saw under what information his opponent was playing his hand off.

Game theory could also be used to describe politics. The best example would be the Cuban Missile Crisis. Why did Kennedy order a blockade around Cuba? Consider it more like a game of chicken between Kennedy and Khrushchev, whoever swerved away lost. It was important during the Cold War to convince the enemy that you would not swerve away. Once convinced, the other player will prefer to swerve away since he would want to avoid a crash.

Game theory has many applications and utilizing it when making decisions will prove very beneficial. Whether it be a game shows, poker, or politics, game theory has an important role that can determine who is the winner.