Edo Yahav is the VP R&D, GM Israel at SafeBreach, a cybersecurity company that simulates hacker breach methods. He has joined CTech to share a review of "The Art of Strategy: A Game Theorist's Guide to Success in Business and Life” by Barry J. J. Nalebuff
"The Art of Strategy: A Game Theorist's Guide to Success in Business and Life”
Author: Barry J. Nalebuff and Avinash K. Dixit
In this book, you can find a comprehensive introduction to the fascinating world of theoretical and practical strategy. The book is riddled with real-life, practical examples from areas I constantly overlooked.
Game theory means rigorous strategic thinking. It is the art of anticipating your opponent's next moves. Though parts of game theory involve simple common sense, much is counterintuitive, and it can only be mastered by developing a new way of seeing the world. Using a diverse array of rich case studies one can easily see how nearly every business and personal interaction has a game-theory component to it, knowing and realizing these components is key to mastering game theory
A predominant theme in the book is that different situations require different analyses and behavior, understanding which situation you are facing is key to mastering the game and achieving success. For example, in certain "winner-takes-all" situations/games, when you are ahead, it is usually not in your best interest to be the first to make a "move", in such cases it is usually best to just copy your opponent (in an independent gain scenario). However, in a different scenario altogether, when it seems as if an external party is overwhelming you, it may be prudent to form an alliance against the "bully" - that may be the only way to overcome their edge.
Interactions are key. Another important theme is that the essence of game theory is in the interactions between player decisions. Several different interactions warrant different decisions. For example, situations when players make their decisions simultaneously are very different from situations where players make their decisions one after the other (turn-based). The wealth of information that is available to you at each stage will construct very different decisions.
Understand your opponent's strategy, contrary to the previous theme where there are interactions that lead to other interactions and so forth, there are situations where you need to make a decision that is not based on what your opponent did, but rather on what their best interest will lead them to do. For that to happen you need to analyze the possible outcomes and their potential rewards in order to "make your move".
What I’ve Learned:
I believe that through this book I was made aware of the impact data has on our decision-making. The real-life situations where this is relevant in my line of work are staggering.
When deciding on an R&D strategy, it is critical to have the right data. Although it is important to understand what data is not available at this stage and attempt to pursue it, it is even more important to understand what data can't be attained and make an informed decision based on the partial data at hand.
Another important concept is that in order for people to work together, they need to fully understand the other side's point of view, way of thinking, and goals. This is relevant to situations where different development teams need to collaborate, or when development teams are working with product managers or DevOps. They all have the same goals but different understanding of how to get there, usually, there is not a clear right or wrong. In these cases - understanding the other side will yield a better result or at least lead to better decision making.
Who Should Read This Book:
Since we all make decisions every day, this book is actually for everyone, not just managers, coaches, or politicians. Anyone that would like an in-depth look into the decision-making process between individuals or societies would love this book as it provides a comprehensive look into the process without the need for pre-requisite knowledge.