I was first introduced to game theory by Thomas Schelling’s early work: The Strategy of Conflict, published in 1960. The book explores game theory’s application to real world conflicts wherein there is a conflict and shared interests between players, and to the nuclear strategy of the cold war. His examples and suggestions diversely range from swapping kindergarteners with the Soviet Union to rigging yours and your neighbor’s houses with explosives to ensure the continuity of etiquette.
The book expands quite a bit on Chapter 7 in that it isn’t dedicated to game optimization in a matrix, but rather focuses on some of the foundations of game theory: “If I do this, how will you react?” Examples Schelling gives include how paratroopers find each other after a botched jump, how military officers on opposing sides decide demarcation lines without communication and what to do if you’re chained to an enemy near the edge of a precipice.
Many of Schelling’s suggestions seem ridiculous now, but they firmly root the theory of games in situations everyday people can relate to. Some of his ideas proved to be farsighted. For example, in his chapter “Threats,” he discusses the theory that military conflicts scale comparatively. Therefore, if one side doesn’t use an air force, neither will the other. This exact scenario came to pass in the 1962 during the Sino-Indian conflict, in which both sides used exclusively infantry. It also epitomized the proxy wars of the Cold War, in which neither the U.S nor the U.S.S.R fought one another directly. In peer to peer conflicts we are confronted everyday with this elegant application of game theory. Consider an argument with a friend. You might insult each other, but only lightly. In an argument with an enemy you would both scale the aggression in anticipation of each other’s aggression. Of course, in this application the game is quite a bit longer than the in the prisoners dilemma and there is a degree of communication between the two players via responsive moves. Nevertheless, it’s useful to think of our daily interactions in this light because we can fine tune our behavior.
In short, game theory doesn’t need to be esoteric. It can be useful to anyone willing to apply logic to a behavioral situation.