Friday, October 7, 2016

More about game theory -- and the PMO

Probably the greatest benefit of working with game theory arises from evaluating the consequences of each game step.
  • You do this ... your consequence
  • Your competitor or opposite number does something .... their consequence
The challenging game situation for the PMO is when your game opposite can't or won't collaborate with you, making the consequences for both potentially less optimum than if you collaborated
  • Adversaries across the table in a negotiation
  • Business partners that are really your nemesis
  • Win-lose situations ... often politically motivated (shocking!), but sometimes it's all about money (another shock) ... if the other guy gets it, you don't
Sort of win
Some people are stubborn; they insist on win-lose when sort of win - sort of win is available. In some circles, this is called compromising to get more than nothing.

Nash Equilibrium
Did you see the movie "A Beautiful Mind" or read the book about the Princeton mathematician, John Nash?
Nash was a game theorist. He devised something called the "Nash Equilibrium".

In practical terms, you and your non-collaborator have arrived at a Nash Equilibrium when simultaneously neither you nor your opposite has an alterative game move of greater benefit. Consequently, neither you or your non-collaborator is motivated or incentivized to change positions. To wit: you've arrived!

Ooops! There's a cost for being at equilibrium. In fact, you may have arrived at a sub-optimum point when looking through the lens of win-lose; but when taking the broader and more strategic view point ..... win-win .... you are at a good spot.

Strategic thinking
Why is win-win more strategic? Because today's competitor may be tomorrow's partner .... certainly that's the case in the technology contracting business. To win, you often have to fill a hole in your corporate resume. And that filler partner may have been your game competitor in the last competition.

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