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TOP 500 REVIEWERon 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.
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on July 29, 1999
Interesting game theory book without the math. Too much stuff about labor strikes. A bit too theoretical to be applied directly, but definitely some interesting things to think about. One interesting theoretical proposition, in a 2 person race the leader should mimick all of the moves of the follower, that way the follower will never gain any ground. Best part of book is cited to some journal...
"In 1890 there were three ways to power automobiles - steam, gasoline, and electricity - and one of these was patently inferior to the other two: gasoline... A turning point for gasoline was a 1895 horseless carriage competition sponsored by the Chicago TimesHerald. This was won by a gasoline-powered Duryea - one of only two cars to finish out of six starters - and has been cited as the possible inspiration for R.E. Olds <Oldsmobile> to patent in 1896 a gasoline powered source, which he subsequently mass produced. Gasoline thus overcame it's slow start. Steam continued viable as a power source until 1914, when there was an outbreak of hoof-and-mouth disease in North America. This led to the withdrawl of horse troughs - which is where steam cars could fill with water. It took the Stanley brothers about three years to develop a condenser and boiler system that did not need to be filled every thirty of fourty miles. But by then it was too late. The steam engine hasn't recovered. "
" While there is little doubt that today's gasoline technology is better than steam, that's not the right comparison. How good would steam have been if it had the benefit of seventy-five years of research and development? "
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on July 27, 2000
The book is full of examples of using game theory. It shows how to calculate it and how it works. Fine in theory. It maybe be useful in a classroom.
The problem in real life is that so such is unknown. In real life both of you do not have all the facts. What is important and what is not. Often you do not know the rules of the game until you are deep inside of it. The logic may be clear later on but not while you are their. You have no idea of the costs or benefits until its to late. Nor do your competitors.
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on July 27, 2002
CONTENTS: Professors Avinash Dixit and Barry Nalebuff begin the book with explanation of sequential-move games governed by the principle 'look ahead and reason back'. Then simultaneous-move games are introduced by means of prisoners' dilemma, the situation when by playing their dominant strategies (thus theoretically maximizing their payoff) both sides get the outcome that is jointly worse than if they followed the strategies of minimizing their payoff. The paradox lies in interdependency of sides' outcomes. To resolve the problem the competitors have to cooperate i.e. follow their less desired strategies. Temptation to brake rules unilaterally is very strong, to make it worse you cannot control your opponent's move in the game. The rule 'look ahead and reason back' does not work either. But one can manage this.
To tackle the problem strategists transform simultaneous-move games into sequential-move games. That is where the notion of strategic move comes into play. Strategic move is an action designed to alter beliefs and actions of others in a direction favorable to yourself. Strategic move will purposely limit your freedom but in return it will limit your opponent's freedom. Threats and promises are examples of strategic moves that are widely used. Another example of strategic move explained in the book, brinkmanship, consists in creating and maintaining risk of mutually bad outcome. Unlike the compelling threat, brinkmanship does not secure bad outcome, it does not even tell when it may occur. It is left to your opponent to guess at any point in the game if you are on the brink of disaster. By defying yourself an opportunity to influence the situation and making your opponent understand that he is the only capable to resolve the conflict you induce him to compromise.
Then it comes to multi-person games where interdependence is so complex that the outcome seems absolutely unpredictable. Voting is an example of an imperfect system that cannot aggregate up individuals' preferences into a will of the people. The authors show how result of voting depends on the scheme of voting that gives way for manipulation.
When discussing bargaining the authors explore how different schemes of bargaining change sides' power and affect the result. Time is money for both sides but it is likely that they discount future at different rates thus one side gets competitive edge. Simultaneous bargaining can open up possibility for mutually beneficial trade-off, especially when sides value items differently.
OVERALL: The book is well structured and written in an easy-to-understand language, though in some cases it shows contradictions and some explanations seem oversimplified. It is rich in examples and offers cases from different spheres of life. This book instills mathematical approach to problems without going deep into mathematics. So the book will not put off 'mathematically disadvantaged' readers. Even in case this book is the only you read on strategy, you will acquire knowledge that is indispensable nowadays. The book changed my perception of conflicts, games and bargaining.
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on February 18, 2004
For anyone who enjoyed the movie A Beautiful Mind with Russel Crowe playing the Nobel prize winning Professor John Nash, this book does a great job explaining the principles behind Game Theory (prisoner's dilemma etc.) without being too mathematical. After reading you will see Strategy everywhere.
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on December 13, 2001
By giving extensive examples from real business strategy, Dixit and Nalebuff have created and amzing book on Game Theory for the layman (and MBAs, for that matter).
What I like about the book is that they introduce a new way of looking at strategy by using elements of Game Theory. I particluarly like the many examples where on first sight what looks like a good case for a new business falls flat (and bleeds a lot of money) because the competitive actions of other players are not taken into account.
Nalebuff wrote another book called "Co-Opetition", but I like this one much better. That said, an interested person would still have to learn a lot about game theory and strategy in order to try to avoid some of the mistakes highlighted in this book!
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on September 29, 2002
This is my first contact with game theory reading, and i enjoy it very much. It is a required reading at University of Chicago Executive MBA program, Competitive Strategy course.
The content is quiet condense and within everybody's grasp. There is not much mathematical stuff inside, which is good ;-).
It is true that there is much simplification in any game theory, but up to know that is the best possible explaination into the real world, there is no other way to understand the things better. It you are like me, with no prior economic academic background, this book is an eye openner. I enjoy reading it very much. Most of you will.
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on November 26, 2003
Winning takes good strategy. This book will help you to formulate a strategy like one would strategize in a chess game. The book will enable you to think differently about life's challenges and how to overcome them. It is a shame so many good books on strategy and winning are business books because the theories outlined in this book can be used in every aspect of one's life. If you believe logical processes and planning leads to a good winning strategy, then definitely buy this book. It will enable you to reach new heights in formulating a proper winning strategy.
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on August 22, 2000
The authors explain what Game Theory is and HOW it can be applied to REAL life challenges. Quantitative stuff is left out. Loads of examples make you "thinking and understanding" Game Theory, but you have to re-read and re-read it... Nalebuff had "Getting to Yes" (as interviewed)in mind: simplicity, readbility, and knowledge that is of practical relevance. They totally succeeded! One of my MBA mates remarked "That's the thinking they try to teach you at business schools".
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on September 3, 1999
In fact, the book may be too concentrated. I may have to re-read it to grasp all the principles therein. This is not to say that the book is hard to read. It is not. There is so much to take in, and unfortunately, they don't dwell on the examples for long. This should be a required text in any MBA program.
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