A consulting firm specialising in the use of game theory to guide strategic decisions directs me to the following piece of corporate public relations - advice to Barack Obama based on a game theoretic analysis:

Act firmly – To avoid DNC pressure, it is crucial that Obama shows no weakness in his resolve to stay in the nomination race. Show dignity – Even if Sen. Clinton increases her negative messaging, Obama should not respond directly but emphasize his message of unity and hope.

Seek alliances – The analysis revealed that Edwards is an uncommitted player who urgently wants to make a decision. Either candidate could potentially secure his endorsement by aligning with some of his key issues.

Support spiritual values – The game-theoretical tools also exposed how Obama could profit from McCain’s strained relationship with the Evangelical voters; in particular, if Obama embraces some of the Evangelical values, he can lead McCain to abandon his pursuit of key Democratic issues and even influence McCain’s choice of running mate.

This sounds plausible enough, and I am something of a game theory fan. Still, I have some concerns:

Even though the game-theoretical tools make calculations that are inaccessible to the human mind – in this case analyzing 8,388,608 outcomes – the results are made transparent.

That sounds nice. But is it? If the calculations are inaccessible to the human mind, what confidence can we have that the players will follow equilibrium strategies? Still, it sounds fun and not entirely ridiculous. Much much more from me on game theory’s role in the real world in chapter two of The Logic of Life. Chris Ferguson and Tom Schelling are the heroes of the tale, John von Neumann the compelling anti-hero.

April 8th, 2008 in Everyday economics, Logic of Life | Permalink