Game-Changer: Game Theory and the Art of Transforming Strategic Situations

by David McAdams

Overview

A radically new, and easily learned, way to outstrategize your rivals.

“The wise win before they fight, while the ignorant fight to win.” So wrote Zhuge Liang, the great Chinese military strategist. He was referring to battlefield tactics, but the same can be said about any strategic situation. Even seemingly certain defeat can be turned into victory—whether in battle, business, or life—by those with the strategic vision to recognize how to “change the game” to their own advantage.

The aim of David McAdams’s Game-Changer is nothing less than to empower you with this wisdom—not just to win in every strategic situation (or “game”) you face but to change those games and the ecosystems in which they reside to transform your life and our lives together for the better.

Game-Changer develops six basic ways to change games—commitment, regulation, cartelization, retaliation, trust, and relationships—enlivened by countless colorful characters and unforgettable examples from the worlds of business, medicine, finance, military history, crime, sports, and more.

The book then digs into several real-world strategic challenges, such as how to keep prices low on the Internet, how to restore the public’s lost trust in for-charity telemarketers, and even how to save mankind from looming and seemingly unstoppable drug-resistant disease. In each case, McAdams uses the game-theory approach developed in the book to identify the strategic crux of the problem and then leverages that “game-awareness” to brainstorm ways to change the game to solve or at least mitigate the underlying problem.

So get ready for a fascinating journey. You’ll emerge a deeper strategic thinker, poised to change and win all the games you play. In doing so, you can also make the world a better place. “Just one Game-Changer [is] enough to seed and transform an entire organization into a more productive, happier, and altogether better place,” McAdams writes. Just imagine what we can do together.

Product Details

ISBN-13:	9780393239676
Publisher:	Norton, W. W. & Company, Inc.
Publication date:	01/27/2014
Pages:	304
Product dimensions:	6.10(w) x 9.40(h) x 1.10(d)

About the Author

David McAdams is a professor at the Duke University Fuqua School of Business. He is a leading scholar, popular teacher, and game-theory business consultant. He lives with his wife and children in Durham, North Carolina.

Table of Contents

Prologue 11

Introduction 13

Part 1 The Game-Changer's Toolkit 25

Chapter 1 Commit 27

Game-Theory Focus 1 The Timing of Moves 46

Chapter 2 Invite Regulation 56

Game-Theory Focus 2 Strategic Evolution 68

Chapter 3 Merge or "Collude" 78

Game-Theory Focus 3 Equilibrium Concepts 93

Chapter 4 Enable Retaliation 103

Chapter 5 Build Trust 115

Chapter 6 Leverage Relationships 128

Summary: How to Escape the Prisoners' Dilemma 145

Part 2 The Game-Changer Files 149

File 1 Price Comparison Sites 153

File 2 Cod Collapse 162

File 3 Real Estate Agency 169

File 4 Addicts in the Emergency Department 179

File 5 eBay Reputation 194

File 6 Antibiotic Resistance 211

Epilogue: The Triumph of Game-Awareness 235

Acknowledgments 239

Notes 245

Index 279

Editorial Reviews

11/04/2013
All of life is a sly, byzantine battle of wits in this intriguing if somewhat contrived treatise. Duke business professor McAdams gives a sketchy but engaging rundown of topics in game theory—especially the celebrated Prisoners’ Dilemma, the conundrum that prompts perps to rat each other out when they would be better off remaining silent—and applies them to confrontations between business competitors, nuclear superpowers, college football teams, bacterial species, doctors and patients, and parents and children. From his analyses flow enlightening discussions about the role of regulations, cartels and collusion, retaliation and punishment, trust and ongoing relationships, and transparency of actions in shaping economic and social behavior. McAdams deploys these precepts to suggest solutions to real-world problems, from stamping out fraud on eBay and lowering real-estate agents’ commissions to regulating fisheries and suppressing antibiotic-resistant tuberculosis. None of this quite gels into “the game-theory approach to life” that he touts, but rather amounts to a shrewd but unsystematic probing of the complex, subtle, often perverse incentives that creep into business and social interactions. Still, McAdams’s nifty insights into the oddities of gamesmanship make for an absorbing read. 30 illus. (Jan.)

Publishers Weekly

★ 2014-01-04
McAdams (Duke Univ. Fuqua School of Business) transforms the concept of game theory, used in business, statistics and elsewhere, to introduce what he calls the "game-theory approach to life." Over the past 40 years, the author writes, game theory has become "a mainstay" in economics, political science, business strategy and the military, among other areas. Developing what he calls "game awareness," he generalizes a method of plotting tactics and provides actionable insights in order to improve the understanding and predictive capabilities that can enrich the lives of families and individuals. Out of many possible games, McAdams returns most frequently to the classic "Prisoners' Dilemma." Two partners in crime separately face the choice whether to confess or not. Confession, however, apparently the best choice for each, will be the worst for both. McAdams shows how to recognize life situations based on this dilemma to illustrate his principle that ruthless competition is not always the best strategy. He provides six methods to accomplish this and supplements them with another three ways to change the game completely. Each is intended to build an ethic of cooperation and trust. The author employs examples along the "gaming tree" and the "payoff matrix." The gaming tree represents players' decisions as branching points and summarizes the sequence of options as choices play out. The matrix is an arrangement of rows and columns that organizes an overview of players and their possible moves; it permits ranking of outcomes and comparison of different games to identify their common features. McAdams also provides his "Game-Changer Files," in which he discusses current real-life problems—e.g., online price competition and real estate agency—to highlight the way "game awareness" can be generalized to the benefit of individual freedom of choice. Real-life lessons presented in a readily accessible way for the benefit of nonbusiness readers.

Kirkus Reviews

"Ideally, business strategy books provide both general insights applicable to a broad set of competitive situations and illustrations of the theory that demonstrate the richness of the insight and the practical formulation of strategy. Game-Changer is chock-full of both insight and applications."

R. Preston McAfee

"David McAdams’s Game-Changer is a rare book: a nontechnical first introduction to game theory that also offers a fresh perspective, on how the best strategy for playing a game can often be to change the rules. I can see that I’ll have lots of opportunities to recommend it."

Alvin E. Roth

David McAdams's Game-Changer is a rare book: a nontechnical first introduction to game theory that also offers a fresh perspective, on how the best strategy for playing a game can often be to change the rules. I can see that I'll have lots of opportunities to recommend it.--Alvin E. Roth, winner of the 2012 Nobel Prize in Economics

Ideally, business strategy books provide both general insights applicable to a broad set of competitive situations and illustrations of the theory that demonstrate the richness of the insight and the practical formulation of strategy. Game-Changer is chock-full of both insight and applications.--R. Preston McAfee, author of Competitive Solutions: A Strategist's Toolkit

Intriguing.... An absorbing read.-- "Publishers Weekly"

Real-life lessons presented in a readily accessible way for the benefit of non-business readers.-- "Kirkus Reviews, Starred Review"

From the Publisher