Status Updates From Game Theory at Work: How to...

If someone freely gives you stock advice, ask why she can't get anyone to pay them for the information.
Survivorship bias makes mutual funds' past performances seem misleadingly impressive.

Adverse selection occurs when you attract those with whom you least want to interact.
People desperate to interact with you are often the ones with whom you should least want to deal.
Playing hard to get can overcome adverse selection by convincing others that you are not desperate and thus not undesirable.
Adverse selection is caused by hidden information and so can be remedied by information acquisition.

In a prisoners' dilemma game, competition will harm both players. The players would be better off if they worked together, but if the game is played only one time, then self-interest will always force them into ruinous competition.

-A Nash equilibrium is an outcome where no player regrets his move given his opponent's strategy.
-A Nash equilibrium is a powerful game theory tool because it shows when an outcome is stable; it shows outcomes where no player wants to change his strategy.
-When trying to move a new equilibrium, you should consider if the new outcome would be a Nash equilibrium. If it's not then your new outcome is unstable...

-Massive coordination games often winner-take-all affairs.
-To win a massive coordination game, it's often more important to be perceived as popular than good.
-When playing massive coordination game it's a sound strategy to buy early popularity by selling your product at a loss.

A dominant strategy is a strategy that gives you a higher payoff than all of your other strategies, regardless of what your opponent does.

The trouble with the rat race is that even if you win, you're still a rat.
-Tomlin

Securing a reputation for honesty also increases credibility. Outside of game theory land, nice people strive to be honest because it's "the right thing to do." In the hypercompetitive business world, however, honest behavior arises more from self-interest than morality.

A prince never lacks legitimate reasons to break his promise.
-Machiavelli

Game theory, the study of conflict, illuminates how rational, self-interested people struggle against each other for supremacy.