CTech Book Review: Embracing Game Theory for R&D Strategies
Title: “The Art of Strategy: A Game Theorist’s Guide to Success in Business and Life”
Author: Barry J. Nalebuff and Avinash K. Dixit
In this book you will find a comprehensive introduction to the fascinating world of theoretical and practical strategy. The book is full of concrete, practical examples of areas that I have consistently overlooked.
Game theory means rigorous strategic thinking. It’s the art of anticipating your opponent’s next moves. Although some parts of game theory involve simple common sense, many are counterintuitive and can only be mastered by developing a new way of seeing the world. Using a wide range of rich case studies, one can easily see how nearly every professional and personal interaction has a game theory component, knowing and realizing these components is essential to mastering game theory.
A prominent theme in the book is that different situations require different insights and behaviors, understanding what situation you’re up against is key to mastering the game and succeeding. For example, in some “winner takes all” situations/games, when you’re in front, it’s usually not in your best interest to be the first to make a “move”, in such cases, it’s usually better to simply copy your opponent (in an independent win scenario). However, in a completely different scenario, when it seems like an outside party is overwhelming you, it may be prudent to form an alliance against the “bully” – this may be the only way to overcome their advantage.
Interactions are essential. Another important theme is that the essence of game theory lies in the interactions between player decisions. Several different interactions justify different decisions. For example, situations where players make their decisions simultaneously are very different from situations where players make their decisions one after the other (turn-based). The wealth of information you have at each stage will lead to very different decisions.
Understand your opponent’s strategy, unlike the previous theme where there are interactions that lead to other interactions and so on, there are situations where you have to make a decision that is not based on what your opponent has done, but rather on what is in his interest will lead them to do. For this to happen, you need to analyze the possible outcomes and their potential rewards in order to “make your choice”.
What I learned :
I believe that through this book I have been sensitized to the impact of data on our decision-making. The actual situations where this is relevant in my line of work are astounding.
When deciding on an R&D strategy, having the right data is essential. While it is important to understand what data is not available at this point and try to pursue it, it is even more important to understand what data cannot be obtained and make an informed decision based on the data. partial available.
Another important concept is that for people to work together, they must fully understand the other party’s point of view, way of thinking and goals. This is relevant in situations where different development teams need to collaborate, or when development teams work with product managers or DevOps. They all have the same goals, but a different understanding of how to get there, usually there’s no clear right or wrong. In these cases, understanding the other side will yield a better outcome or at least lead to better decision making.
Who should read this book:
Since we all make decisions every day, this book is for everyone, not just managers, coaches or politicians. Anyone who wants an in-depth look at the decision-making process between individuals or corporations would love this book because it offers a comprehensive overview of the process without the need for prior knowledge.