Monday, March 28, 2011

How to win the "game of chicken"

The point of studying game theory is to understand where you are likely to end up if you play rationally, optimally, and self-interestedly. This is called the "equilibrium" of the game.

If you don't like the payoffs that you receive in the equilibrium of the game, then you had better try to do something about it. Here is a nice discussion of how to change the game of chicken to your advantage.
  • Accept, right off, that there is no way to guarantee victory. The best either player can hope for is to improve the odds of inducing the other player to swerve. Toward that end, there are many tactics, none especially appealing. Start with reputation. If you are known as a nonswerver, perhaps because you have been "undefeated" in previous encounters, your opponent is bound to take that into account.
  • Reputation can be burnished in several ways, like cultivating an image of being literally crazy, or perhaps suicidal.
  • Another tactic: Drive a large and imposing vehicle. If an armored cement truck is confronting a VW Beetle in a game of chicken, who backs down?

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