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Playing Chess Without Rules
on February 20, 2013
"Strategic thinking is the art of outdoing an adversary, knowing that the adversary is trying to do the same to you." So begins Dixit and Nalebuff's guide to gaining the competitive edge. They intend this book for "businessmen," politicians, football coaches and parents--anyone who contends with an adversary. Their goal is to teach readers about game theory, the "emerging science of strategy," without jargon or mathematical formulas.
They begin with "ten tales of strategy" from a variety of settings. Using examples from sports, politics, history--and even a children's fairy tale--the authors illustrate the pervasive need for strategic thinking. Successive chapters present aspects of strategic thinking and explore their variations. Initial chapters address anticipating a rival's response, seeing through a rival's strategy, and adopting the best strategy in the cooperate-or-betray game of the Prisoner's Dilemma.
The authors then explore the art of making strategic moves, actions "...designed to alter the beliefs and actions of others in a direction favorable to yourself." We learn about unconditional moves as well as threats, promises, warnings and assurances. Succeeding chapters explain the value of making credible commitments, of sometimes being unpredictable, and of "playing chicken" with brinksmanship. We learn the relative strengths of cooperative and competitive strategies and how to choose between them. The final three strategy chapters explore the possible moves when adversaries are voting to make decisions and how to make the best use of bargaining positions and incentives.
There are numerous brief examples throughout the book. Each strategy chapter closes with a more elaborate case study to be analyzed using the chapter's principles. The final chapter is a collection of 23 fresh case studies that serve as a "comprehensive final exam" by drawing on strategies from all chapters. The authors achieve their goal of a readable, nontechnical introduction. They even lead us into some minimally-painful use of decision trees and contingency tables.
I recommend the book as a serious introduction to strategic thinking. Well, perhaps the occasional cartoon it includes disqualifies it as "serious." But its lessons prepare readers to act strategically in serious, real-life situations. Reading it is a good move.