This is the first book I've read in a while that I've really had fun with. It riffs on the infamous Red shirt mem from Star Trek—that the unknown guy with the red shirt is always the guy to die on an away mission. In the book, the red shirts realize what's happening to them—that one of them will die every time they go on a mission with the captain. They begin complex and funny schemes and plans to avoid away missions at all costs.
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By Sarah Vowell.
The Revolutionary war got off to a rocky start. After rebelling against Britain for raising taxes, it was difficult to raise the taxes needed to pay for the army needed to fight that rebellion.
Along come the French and Lafayette. Looking for glory. Looking for discount ways to harass the English.
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The Remarkable Story of Risk. By Peter Bernstein.
Over the centuries, risk has evolved from God's will, to something that can be analyzed and thought through. While much of the future is unknowable, parts of it do obey the laws of probability. Warning, warning… parts of it do not. You can't manage risk away. That has a habit of blowing up.
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This book looks at many common child rearing problems through the eyes of Game theory. What works. What are the pit falls.
How should you split chores?
How should you split cake?
How do you decide what movie to watch?
The book points out that the common cake splitting strategy—one child cuts, the other chooses—can be used in many situations. One child creates two lists of chores, the other chooses. One child creates to piles of toys. The other chooses.
All of these break down with three or more children, though there are complicated ways you can deal with this.
The book also has a section on voting and it's pitfalls. When you are voting for more than two things, then there are many corner cases were less preferable options will win.
By William Poundstone.
<![if !supportLists]>1. <![endif]>Luck. The investor had the luck/foresight to buy a few stocks that grew exceptionally in the long run.
<![if !supportLists]>2. <![endif]>Insider information.
<![if !supportLists]>3. <![endif]>Sleazy tax & fee dodging mechanisms that blow up, or are shut down as soon as the dodge is brought to light.
<![if !supportLists]>4. <![endif]>Extreme leverage that blows up in a crisis.
<![if !supportLists]>5. <![endif]>Business makers—invest in a company that is undervalued but has potential. Not only does the Business maker buy the stock, but he also participates in the company by becoming part of the management and leadership.
Reading this book a second time, I learn’t more about risk management and the KC. The KC can calculate the line between aggressive betting/ investing amd crazy careless betting. There are many reasons to bet much less than the KC would suggest. The KC maximizes growth in the long term. If you need money in the short term…
I'm continuing my tour of Poundstone with "The Prisoner's Dilemma" This is a history, Game Theory, the people that created it, it's use and impact on history, and a few simple games…
Stag Hunt. This is a game similar to the tragedy of the common. To hunt a stag, you need two or more people working independently. While you are hunting, there is no guarantee that you will land a stag. It would be best if you did, but it's long hard work. Now, if you take a detour while searching for a stag, and hunt some easy to find birds instead, then it's ok for you, since you've found a little food, but your hunting partner won't succeed.
Deadlock—a situation where it's best for opponents to keep fighting.
Chicken—Two people drive headlong towards each other. The one who swerves is the chicken. If neither swerve, then both die.
Prisoners Dilemma. Two prisoners are being questioned about a crime in separate rooms. Each is offered a choice… "If you rat out the person in the other room, then you will get a lesser sentence. The other person will get a long sentence." But, if both of you stay silent, then you both go free. Would you trust the person in the other room to not rat you out?
Suckers Bet—A dollar bill is put up for auction. You can bit any amount and bids continue until there are no more. The catch is that the 2nd last person who bids also has to pay his bid, but gets nothing in return. What's vicious about this game is that if someone pays $1.00 to buy the $1.00, then it makes sense for the person who bid 95 cents to bid $1.05 to get the dollar, since he will loose five cents by over paying, but 95 cents if he comes in second place.
Iteration—the dynamic of many games changes if you play the prisoners dilemma, or chicken once, then the strategy is very different than if you have to play it repeatedly—the best way to get cooperation is through an ongoing relationship and not a one shot transaction.
With many of these games, chicken is the best example, it's the most unstable party who has the advantage. This is not a happy thought.
Tit-For-Tat. This is a very robust strategy for dealing with iterative games. Many strategies only work if they are secret, if other people figure them out, then they loose there value. But, Tit-For-Tat works well when everyone knows that's how you operate. It works well if everyone plays that way.
The one catch with Tit-for-Tat is that the size of the Tit must be the same as the size of the Tat. If the two are different (perhaps due to subjective judgement) then Tit-for-Tat can spiral out of control with endless tit's responding to subjective tat's.
More William Poundstone.
Humans re terrible at being random. This has consequences thought our lives…
The game of rock paper scissors has patterns to it. Women are most likely to pick scissors first. Men Rock. After the first round, people tend to pick the thing tat would win over the thing that lost—its too obvious to pick the thing that would win over the thing that won.
Fake accounting records follow detectible patterns
Multiple choice—the right answer is probably the longest answer. You can only be right in one specific way. You can wrong in many ways.
I'm enjoying going though William Poundstone's books. His older books are deep investigations. His newer books are simple and more pragmatic. I wonder what drove that.
