Game Theory in Life

Author: Yu Zhiguo, Jiang Yuyan
Publisher:
Publish Date: 2006-08-01
Features: Game theory and information economics can not only shine in the academic field but also be fully utilized in other areas such as military, management, sports, politics, public relations, and personal life. They can even be traced in biology. In ordinary business management, managers must master the art of management by applying game theory and information economics spontaneously and consciously. In daily life, people can use the thought methods of game theory and information economics to analyze and solve practical problems. In the history of economics, three major "revolutions" have occurred: the "Marginal Analysis Revolution," the "Keynesian Revolution," and the "Game Theory Revolution." The emergence and development of game theory and information economics have triggered a profound revolution in economics because they represent a new concept, new methodology, new analytical methods, and a completely new way of thinking. Game theory and information economics can not only shine in the academic field but also be fully utilized in other areas such as military, management, sports, politics, public relations, and personal life. They can even be traced in biology. In ordinary business management, managers must master the art of management by applying game theory and information economics spontaneously and consciously. In daily life, people can use the thought methods of game theory and information economics to analyze and solve practical problems. In the history of economics, three major "revolutions" have occurred: the "Marginal Analysis Revolution," the "Keynesian Revolution," and the "Game Theory Revolution." The emergence and development of game theory and information economics have triggered a profound revolution in economics because they represent a new concept, new methodology, new analytical methods, and a completely new way of thinking. Game theory and information economics can not only shine in the academic field but also be fully utilized in other areas such as military, management, sports, politics, public relations, and personal life. They can even be traced in biology. "High heaven remains unchanged, yet the sorrows of the past and present are endless; foolish men and women, pity them for the unpayable debts of love." Let's first look at the love story described in O. Henry's novel The Gift. A newly married couple was very poor and struggling. Besides the wife's beautiful golden hair and the husband's inherited gold watch, there was nothing they could be proud of. Although their life was hard and exhausting, they loved each other deeply. Each cared more about the other than about themselves. To promote the other's interests, they were willing to give and sacrifice everything for each other. As it happened, Christmas was the next day, and the couple had no extra money. To make their loved one's life a little better, each still wanted to prepare a gift for the other secretly. The husband sold his beloved watch and bought a set of beautiful hairpins to match his wife's golden hair. The wife cut off her beloved hair and sold it to buy a watch chain and a watch case for her husband's watch. In the end, when it was time to exchange gifts, they helplessly discovered that the things they cherished so much had been given up as the price of the gifts. The things they had painfully exchanged for turned out to be useless. Out of selfless altruistic behavior, their actions ended up harming both parties' interests. O. Henry wrote in the novel, "Smart people are also smart when it comes to giving gifts. They usually exchange what they have in surplus for the benefits of giving. However, in the simple story I'm telling, the two apartment-dwelling fools were incredibly foolish, sacrificing the most precious treasures under their roof for each other without gain." From this passage, it seems that O. Henry did not think the couple was rational. P21