Game Theory and the Power of Prediction
Game theory is a powerful tool that can be used to predict the actions of “players” with a given set of options available to them. The applications of game theory are broad; people such as Bruce Bueno de Mesquita, have taken game theory to the world scale, and have used it to predict new heads of state and the rise and fall of governments with astounding accuracy. Bruce Mesquita’s predictions rely on a software model that, once given players and a set of rules, will predict the most desirable outcome for those involved, as well as a forecast. Software models such as Mesquita’s are constantly being developed in order to predict the best course of action in large systems, such as politics and finance.
With great advances in predicting how rational people act, game theory could theoretically be used to stop conflicts before they start. With software already in use to optimize mergers and acquisitions of large companies and to minimize negotiation and maximize profit, broader conflicts such as wars and territorial disputes could be solved without armed forces clashing. Software governed by game theory could predict what the end of a armed conflict would be, the optimal course of action for each participant, and allow countries to skip fighting entirely. As prediction accuracy improves further, game theory software could even be used to optimize people’s day to day lives, from relieving traffic on highways based on predicting what routes will be most congested, to dividing up divorce settlements based on what each party values most. Clearly, game theory is going to play a very prominent role in the future to come, from making daily life easier, to bringing an end to armed conflicts.
Sources
http://www.economist.com/node/21527025
http://www.nytimes.com/2009/08/16/magazine/16Bruce-t.html