A thread through the archive
Essays tagged “Nash equilibria”. Follow an idea across the archive.
Scott presents six game theory scenarios demonstrating how strategic thinking can force rational actors into seemingly irrational outcomes, ranging from theoretical examples like evil plutocrats and hostile takeovers to real-world applications like dollar auctions and the Golden Balls game show.
Scott explains backward reasoning in game theory through decision trees, culminating in a counterintuitive example where giving the US president line-item veto power could actually reduce the president's ability to achieve desired outcomes.
Scott introduces the Prisoners' Dilemma, showing how rational reasoning leads two criminals to defect against each other even when mutual cooperation would benefit both, then explores why iterating the dilemma doesn't fully solve the problem.
Scott explains Nash equilibria (outcomes where no player regrets their strategy given the other's choice) and Schelling points (focal points that help coordinate between multiple equilibria), using examples ranging from meeting a partner to military strategy to show how these game theory concepts apply to real-world coordination problems.
Scott introduces a 10-post sequence on game theory fundamentals, drawing from 'The Art of Strategy' by Dixit and Nalebuff, with links to all planned posts.