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I have to read Game Theory.
I have to read Game Theory.

Text/Lu Huanan

Game theory is one of the basic theories of modern economics, which studies people's decision-making choices and the corresponding equilibrium problems. A classic game case helps us understand what a game is, which is the famous "smart pig game".

This example is about: there are two pigs, a big pig and a little pig in the pigsty. There is a pedal on one side of the pigsty. Every time you step on the pedal, a small amount of food will fall on the feeding port on the other side of the pigsty far from the pedal. If one pig steps on the pedal, the other pig has a chance to eat the food that has fallen on the other side first. As soon as the pig steps on the pedal, the big pig will eat all the food before the pig runs to the trough; If the big pig steps on the pedal, there is still a chance to run to the trough and compete for some leftovers before the little pig finishes eating the fallen food. Now ask: "What strategy will the two pigs adopt?" The answer is: the pig will wait comfortably by the trough, while the big pig will tirelessly run between the pedal and the trough for a little leftovers. The result of this game is used by economists to explain a series of socio-economic phenomena.

In fact, the pig chooses to wait and let the big pig pedal, and the reason why he chooses to "take a boat" (or hitchhike) is simple: if the big pig chooses to act, the pig can only get little income; If pigs wait, they can get higher returns, and waiting is better than action; On the premise that the big pig chooses to wait, if the little pig acts, the income of the little pig will be lower or even zero. In a word, waiting is better than action.

In the management of small enterprises, learning how to "hitchhike" is the most basic quality of a shrewd professional manager. At some point, it is wise to wait and let other big enterprises explore the market first. Do something before you do something!

For example, in the case that a new product has just entered the market and its performance and function are not familiar to people, if not only a small enterprise, but also other enterprises with stronger production capacity and sales capacity are engaged in the production of this new product, it is absolutely unnecessary for small enterprises to invest a lot of advertisements to promote their products first, so as to compete with other enterprise brands and gain an advantageous position. A shrewd manager should first make a careful account: compare the expected income of brand leadership with the income that can be obtained by spending the cost of brand competition on product expansion and reproduction while waiting for the market of large enterprises to mature, so as to confirm which scheme is more beneficial to enterprises.

"Hitchhiking" is actually another choice for professional managers to face every expense. Paying attention to and studying it can save a lot of unnecessary expenses for enterprises, thus making the management and development of enterprises go to a new level. This phenomenon is very common in economic life, but managers of small enterprises are rarely familiar with it.

Someone once became a "big pig" in the bathhouse. At that time, they rushed into the bathhouse in the first batch, only to find that the cold water in the water pipe had not been exhausted. Whoever steps on the pedal first will splash cold water; If everyone doesn't pedal first, obviously you can't take a shower. But if some people pedal first, others can ... so everyone in the bathroom is playing like "smart pigs". As a result of the game, everyone did not step on the accelerator, but looked at a "big pig"-someone A, who was stupidly drenched in cold water. The drainage speed of a shower is too slow, and cold water is endlessly splashed on the body. A man with a twisted face looked around and was surprised to find that everyone was standing there, looking up at the shower pouring overhead from time to time. Someone A realized that they were waiting for themselves to drain the cold water! This time someone's armor is really stiff, and the cold feeling that comes with it can be described as "tragic". Someone would like to thank another "big pig" who went into the bathroom later to help him drain water, which alleviated and shortened his pain and made these "little pigs" take a hot bath happily.

The clever "little pigs" easily defeated the "big pig" in this "smart pig game" with their composure and wisdom. The following conclusions can be drawn:

First of all, if someone A and another "big pig" don't pedal first, will anyone among the "little pigs" pedal first? The answer is yes. In a group that has been in trouble for a long time, there will always be a fool who dares to die for the benefit of the group, but his end must be tragic.

Secondly, when the group morality is exhausted, is it possible for society to move forward? The answer is possible. If the manager of the bathroom adds several drain switches in the bathroom, the piglets can use this "advanced" device to quickly drain cold water and improve the welfare of the group. In other words, even if social moral standards are lowered to the limit (everyone becomes absolutely selfish), technological progress can still improve the welfare of the whole society. Perhaps this is the so-called "development is the last word".

Third, can institutional constraints replace moral constraints? Can a system be established to gradually improve the ineffective behavior of this group? It is also possible. If the bathroom is changed to the system of charging according to the length of bathing time to increase the speculative cost of "little pigs", a considerable number of them will become "big pigs", which is a method that modern western economists are racking their brains to explore.

Finally, can this problem be solved through education? This is the most fundamental way out. But this kind of education should be different from the usual ideological and political education. People are eager to live in a big family of unity, friendship, mutual assistance and mutual accommodation, but in the process of building this big family, people largely ignore the most fundamental factor on which the family is formed, that is, tolerance and love. It is impossible for a person who grew up in an environment where there is no tolerance and love, but only rules and regulations, to truly love this society and make contributions to social harmony and progress.

Philosophy of life:

In order to maximize the benefits, we must learn the essence of "game theory" and distribute the benefits well to achieve the best results.

theory of game