The Games People Play 2.0

Was watching the BBC 2 programs on Sunday night - The Trap - The series explores the concept and definition of freedom, specifically how a simplistic model of human beings as self-seeking, almost robotic, creatures led to today's idea of freedom - using Game Theory quite heavily.

It's probably the most detailed exploration of Game Theory in the media, and I was tempted to look at Technorati to see how much was written about Game Theory in the Blogosphere - and its very little once you've sorted out the cheat tips in World of Warcraft - and most of that is written is about A Beautiful Mind, the film about John Nash, who worked mainly in Game Theory and conceived of the Nash Equilibrium (of which more later).

On reflection, this is odd because a huge amount of the New Tech sphere is relevant - the evolution of the new markets, the design of social software, collaboration in open source, the gaming of digg, Amazon et al, even the building of a succesfull blog, all are major applications for Game Theory. We use quite a lot of it, and elements of similar disciplines like System Dynamics in our work.

It does work for new businesses, as evidenced by Bary Nalebuff - Game Theory professor and founder of a succesful organic tea business. (Article here, bigger article behind signup screen here).

Incidentally, Game Theory (and related areas like System Dynamics) is not really used by the major strategic consultancies (apart from a few enthusiasts) either, and tends to be a play by small niche players....there is hope for us yet

Anyway, here are some links to some good short articles:

Fixed Point on Free vs Paid for Behavioural Economics

John Newton on Game Theory in Open Source

Adam Smith Esq on using Game Theory to redesign Knowledge based business processes.

The Panda's Thumb on Game Theory and Net Neutrality

Freedom to Tinker on the game theory of DRM and Encryption

And finally, the Nash Equilibrium. This is where a situation emerges, typically non optimal, but it is not worth any one of the existing players time to unilaterally change things. It can be shown that so many systems in the world today are of this nature - political, economic, social - and the opportunity is clearly there for smart new entrants who know how to play The Game. (Here is a more tongue in cheek usage)