“The Art of Strategy” from Avinash K. Dixit and Barry J. Nalebuff is a good book for anyone who like to learn the basics of game theory with easy to understand examples and without worrying about mathematical details. Most interesting part of the book is the list of game strategies are explained in simple one liner rules.
“A game is a situation of strategic interdependence: the outcome of your choice (strategies) depends upon the choices of one or more other persons acting purposely.”
Here are some of the rules to remember depending on the situation
- Rule 1 – Games solvable by backward reasoning – Look forward and reason backward.
- Rule 2 – Dominant Strategy – If you have a dominant strategy use it. If you don’t have a dominant strategy, but your rival does, then count on his using it.
- Rule 3 – No Dominant Strategy – If either side has dominated strategy that is uniformly worse for the side playing it than all the rest of the strategies then eliminate dominated strategy from consideration.
- Rule 4 -Equilibrium – If neither side has dominant or dominated strategy, look for for an equilibrium, a pair of strategies in which each player’s action is the best response to the others.
- Rule 5 – Choice and chances – In a game of pure conflict (zero-sum game), if it would be disadvantageous for you to let the opponent see your actual choice in advance, then you benefit by choosing at random from your available pure strategies. The proportion in your mix should be such that the opponent can’t exploit your choice by pursuing any particular pure strategy from the ones available to him – that is, you get the same average payoff when he plays any of his pure strategies against your mixture.