Game Theory & The Human Element
When you’re considering the decision tree for some part of your life, you need to consider the human “veto” element, or the null response. Whenever you have a decision to make, a crush to pursue, or any other human interaction with a future component, you should be thinking about the game trees involved. For example, when negotiating the price of a car, at any stage you have a number of options, such as asking for a lower price, taking a test drive, and walking away. These have certain effects and may preclude other actions. For example, walking away will prevent you from doing anything but waiting for a callback and closing the offer. Asking for a lower price may succeed in getting a lower price or not, and will increase the dealer’s level of irritation and willingness to continue to lower the price.
However, when dealing with people, they always have the null choice, where they do nothing. And at that point, there’s no chance of forward progress. They just kill the entire tree of possibilities and refuse further interaction of whatever you’ve planned. Most people don’t think of this as a player’s option, but it is.
This entry was posted on Tuesday, October 25th, 2005 at 4:45 pm and is tagged with game trees, human interaction, human element, forward progress, game theory, decision tree, callback, veto, willingness, test drive, possibilities. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback.
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