The Predictioneer's Game

'Game theory' is a fancy label for a pretty simple idea: that people do what they believe is in their best interest. That means they pay attention to how others might react if they choose to do one thing or another. Those "others" are anyone believed to be a prospective supporter or opponent. Looking at how their interests intersect or collide is basic to assessing potential outcomes of decision making.

To get a good grip on what people are likely to do requires first approximating what they believe about the situation and what they want to get out of it. By estimating carefully people's wants and beliefs, anyone can make a reliable forecast of what each and every one of them will do.

And if you can predict what will happen, then you can also predict what will happen if you alter what people believe about a situation. This is, in short, how we can use the same logic both for prediction and for engineering the future.

Let me illustrate what I'm talking about with the example of how best to buy a new car. A new car purchase is a costly bargaining experience for most of us because most of us are bad at it. A little strategic reasoning can go a long way to improve the experience... Do your homework and decide exactly what car you want to buy. You may go to dealerships for this purpose... or you may search online.... Decide what you value. Is it safety over performance? Style over comfort?