The Real Thing and the Reel Thing
Everybody has heard of John Nash. He was the world famous mathematician that no one had ever heard of until they saw the movie A Beautiful Mind starring Maximums - uh - that's Russell Crowe.
Of course some readers will take great umbrage at such a condescending, sneering comment. After all some people have read the book by Sylvia Nasar and 'ere that (quite good) book was published, the readers of the Prisoner's Dilemma by William Poundstone learned about John's most famous mathematical discovery. Although the book deals more with the originator of game theory, Johnny Von Neumann, than the other John, the book explains the concept of the Nash Equilibrium. The Nash Equilibrium is a strategy where all players will not regret selecting what they did. Sad to say, it's also been found out that the Nash Equilibrium is often not the strategy that real world people choose. (William, by the way, wrote a previous book Big Secrets, where he first revealed the location of the grave of Walt Disney.)
So what the heck is the point of game theory if it doesn't even predict what people really do? Well, for one thing game theory isn't supposed to predict what people will do, but what they should do if they want to act rationally. But there are cases where not only do people often not act rationally, but it's not always in their best interest to do so. For instance, think about when ...
Well, you can get a sampling of what game theory does - and what it doesn't do - in a analyzing a classic and famous problem - by clicking here.