Game theory was applied during the Cold War to analyze how best to play the “great game” with the Soviets. It has also been applied to bargaining / negotiating.
My employer does advanced marketing research and analysis, and some of our clients are large companies that have a limited number of major competitors (an oligopoly situation). In this situation game theory is useful in making decisions about positioning and marketing—if you change your product lineup, prices, etc., your competitors will make changes of their own in response, and you have to take this into account.
I can’t think of an application to everyday decisions of individuals, however. You’re right that game theory is less relevant when there are many players so that no one player has a major impact on the others.
The reason it works in war and in business is you’ve got a measurable outcome/reward. Lives and dollars. However, we cannot quantify happiness or success with a “how do you fell from 1-10?” survey.
Game theory was applied during the Cold War to analyze how best to play the “great game” with the Soviets. It has also been applied to bargaining / negotiating.
My employer does advanced marketing research and analysis, and some of our clients are large companies that have a limited number of major competitors (an oligopoly situation). In this situation game theory is useful in making decisions about positioning and marketing—if you change your product lineup, prices, etc., your competitors will make changes of their own in response, and you have to take this into account.
I can’t think of an application to everyday decisions of individuals, however. You’re right that game theory is less relevant when there are many players so that no one player has a major impact on the others.
The reason it works in war and in business is you’ve got a measurable outcome/reward. Lives and dollars. However, we cannot quantify happiness or success with a “how do you fell from 1-10?” survey.