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The Science of Strategic Thinking: Make Better Decisions by Predicting What Other People Will Do, with Kevin Zollman, Game Theorist and Co-author, The Game Theorist’s Guide to Parenting
One of the first things a game theorist does whenever a game theorist is approaching a problem is to ask two central questions. First, who are the players and what are their interests? So the idea is to say, who are the other people that are relevant and what do they want out of our interaction? The second question that they ask is, what are the options available to them? What are their moves in the game, so to speak? By understanding those three fundamental parts – the people, their interests, and what options they have available to them – we can oftentimes figure out not just what it is that we ought to do, but also predict what it is that other people are going to do. By thinking about it in that way, especially thinking about what other people’s interests are, we can oftentimes be very effective at figuring out what they’re going to do and what we ought to do in response.
One of the principle problems that people make when they’re in strategic situations is they think, what would I do if I was in the other person’s shoes? The problem with thinking about it that way is if I’m thinking about what I would do, given what my interests are, I might do something very different because I have very different interests. So for instance, I might desire the acclaim of my peers in philosophy departments, but somebody else who works in the industry doesn’t care what philosophers think of them. And so if I think about what I would do, I will oftentimes mispredict, or I will oftentimes get wrong what they’re going to do because I take my own interests with me when I imagine being in the other person’s shoes. One of the most important things that game theory teaches us is that we need to think about what somebody else wants and also what they might do. And in predicting their behavior that way, that allows us to be better at both predicting what they’re going to do, which also helps us to figure out what we ought to do.
So that’s always the first step in any game theory interaction – to figure out what other people want. It’s easy to assume that individual businesses just want more money, something like that. But that’s not always true because businesses are made up of people, and people want lots of different things. So it’s important in any business negotiation or any business interaction to think not just about what the business wants, but also, what do the people who are in that business want? Sometimes they want more money, but oftentimes they just want respect of their peers, or they want to have a stable and safe employment, or something like that. And by thinking about the interests of all the actors involved, we can oftentimes predict better what they’re going to do, which can help us in making our own decisions.