Book·2008

The Art of Strategy: A Game Theorist's Guide to Success in Business and Life

by Dixit, Avinash K.

Editorial policy

Format

Book

Year

2008

Author

Dixit, Avinash K.

Frameworks extracted

146

About this source

A book on strategic decision making using game theory, with applications in business, politics, sports, and everyday life.

Frameworks extracted

146 total

Voting Systems and Strategic Voting

Strategic voting in elections

Impatience and Time Preferences

Impatience in decision-making

Introducing Uncertainty to Game Theory

Uncertainty in game theory

Winner's Curse Framework

Avoid overbidding

Drone and Queen Framework

Sacrificing for success

Pascal's Wager Framework

Bet on the afterlife

Pay Enough or Don't Pay At All

The importance of adequate compensation

Incentives and Organizations in the Public Sector

Designing incentives for public sector firms

Signaling and Countersignaling

Strategic communication in competitive markets

Targeting Transfers through Restrictions on Recipients

Optimizing resource allocation

Countersignaling Framework

Concealing information through actions

Nonlinear Incentive Scheme

Incentivize performance with variable rewards

Auction Design Framework

Designing effective auctions

Incentive to Cheat Framework

Recognizing incentives to cheat

Strategic Move Framework

Making a Commitment More Believable

Excess Capacity Framework

Credible Threats

Excess Capacity

Deterrence and Strategic Thinking

The King Lear Problem

Inheritance and Strategic Thinking

The Dollar Auction

Escalation and Strategic Thinking

Truth Revelation

King Solomon's Dilemma Redux

Strategic information elicitation

A Burqa for Prices

Hidden prices and competition

Winning Without Knowing How

Finding a winning strategy

But One Life to Lay Down for Your Country

Motivating soldiers

But One Life to Lay Down for Your Country Framework

A strategy for motivating soldiers to risk their lives

The Risk of Winning Framework

A strategy for managing risk in a Vickrey auction

The Safer Duel Framework

A strategy for reducing the risk of harm in a duel

Two-Tiered Tender Offer Framework

A strategy for gaining control of a company

Backward Reasoning Framework

Think ahead to make better decisions

Shark Repellent Framework

Prevent hostile takeovers

Look Forward and Reason Backward Framework

Anticipate the actions of others

Two Envelope Problem Framework

Evaluate from the other side's perspective

Incentive Scheme Design

Motivate high-quality effort

Relative Performance Evaluation Framework

Evaluate performance relative to others

Efficiency Wage Framework

Pay to motivate

Efficiency Wages

Paying above the market rate to motivate effort

Nonlinear Incentive Schemes

Using nonlinear incentives to motivate effort

Incentive Contract Framework

Designing contracts to motivate effort

Moral Hazard Framework

The risk of shirking or taking unnecessary risks

Incentive Distortion Framework

Distorting priorities to influence others

Approval Voting Framework

Allow voters to express true preferences

Center of Gravity Framework

Find stability in voter preferences

Condorcet Voting System

Condorcet Rules

A solution to the problem of voting in primaries or general elections

Pivotal Voter Framework

Vote strategically when it matters

Rubinstein Bargaining

Bargaining with patience

Virtual Strike Framework

Resolving labor disputes without disrupting the economy

Brinkmanship and Strikes

Use brinkmanship to gain an advantage

Influencing BATNAs

Influence BATNAs to gain an advantage

Measuring the Pie

Measure the pie correctly

Handicap System in Negotiations

Negotiate with handicaps

Looking Ahead and Reasoning Backward Framework

A framework for strategic decision-making

Tacit Cooperation Framework

Cooperating without explicit agreement

Simultaneous Auction Framework

Bid on multiple items simultaneously

War of Attrition Framework

Outlast the competition

Preemption Game Framework

Be first to market

Dutch Auction Framework

Sealed-Bid Auction Framework

Bid as if you've won

Bidding as if You've Won Framework

Assuming the outcome

Sniping Framework

Last-minute bidding strategy

Buyer's Premium Framework

Who pays the premium?

English Auction Framework

Bid Until You Reach Your Value

Vickrey Auction Framework

Bid Your True Value

Coordination Failure

Uncoordinated choices lead to poor outcomes

Median Voter Theorem

Locate at the median

Slippery Slope Framework

Small steps lead to big falls

Tipping Point Framework

Small changes lead to big shifts

Segregation Dynamics Framework

Understanding how individual preferences lead to segregation

Social Dynamics Framework

Understanding how individual decisions affect others

Path Dependence Framework

History matters

Bandwagon Effect

Follow the crowd

Pigouvian Solution

Internalize externalities

Participation Constraint

Ensure that customers are willing to participate

Incentive Compatibility Constraint

Ensure that customers choose the intended version

Price Discrimination by Screening

Creating different versions to screen customers

Semi-Separating Equilibrium

Partial separation of types

Countersignaling

Refusing to signal conveys info

Signaling by Not Signaling

Absence of signal conveys info

Positive Selection Framework

Selecting the right customers

Adverse Selection Framework

Selectively attract bad types

Screening Framework

Eliciting information through incentives

Signaling Framework

Actions speak louder than words

Mandated Agents Framework

Refusing to deal with mandated agents can be an effective strategy

Moving in Steps Framework

Breaking large actions into small ones can enhance credibility

Communication Framework

Cutting off communication can protect strategic moves

Undermining Your Opponent's Credibility

Preventing opponents from making strategic moves credible

Mandated Negotiating Agents

Using agents to make commitments more credible

Building resolve through group commitment

Moving in Small Steps

Reducing the size of the threat or promise

Leaving the Outcome beyond Your Control Framework

Make a threat credible

Burning Bridges Framework

Deny yourself an opportunity to retreat

Cutting Off Communication Framework

Make a move irreversible

Reputation Framework

Establish credibility

Reputation-Based Systems

Establish credibility through reputation

Contracting Approach

Make commitments credible

Credibility Framework

Making strategic moves credible

Brinkmanship Framework

Deliberate risk creation

Deterrence and Compellence Framework

Influence others through threats and promises

Threats and Promises Framework

Influence others

Commitment Framework

Strategic Moves

Changing the game to achieve a better outcome

Janken Step Game

A variant of Rock Paper Scissors

Mixed Strategy Equilibrium

Randomize to succeed

Coordinated Randomization Framework

Coordinate random choices with others

Randomization Framework

Make unpredictable choices

Randomization in Game Theory

Acting randomly to achieve the best outcome

Minimax Theorem

Minimizing the maximum loss

Mixed Strategies Framework

Randomize to succeed

Iterated Dominance

Eliminate dominated strategies

Dual Approach to Strategic Interactions

Combine Nash equilibrium with additional assumptions

Quantal Response Equilibrium

A refinement of Nash equilibrium

Successive Elimination Framework

Simplifying Games

Chicken Game Framework

Avoiding Collision

Avoiding Conflict

Battle of the Sexes

Conflicting Interests

Focal Point Theory

Converging Expectations

Prominent strategy in games

Nash Equilibrium

Stable state in games

Nash Equilibrium Framework

Stable outcomes through strategic thinking

Stag Hunt Framework

Cooperation through confidence

Tragedy of the Commons Framework

Managing common resources

Collusion Detection and Prevention Framework

Preventing cheating in business

Effective Punishment Strategy

Deter cheating with clarity and certainty

Punishment Regime Framework

Punish those who cheat

Contribution Game Framework

Contribute to the common good

Reciprocator Framework

Cooperate until others defect

Tit for Two Tats

Cooperate, then mimic, with forgiveness

Prisoners' Dilemma

When self-interest leads to bad outcomes

Being of Two Minds

Considering multiple perspectives

Combining Forward-Looking Analysis and Value Judgment

Synthesizing science and art

Evolutionary Advantage of Fairness

Fairness has survival value

Negotiation with a twist

Backward Reasoning

Think forward, reason backward

Decision Trees and Game Trees

Visualize Strategic Situations

Look Forward and Reason Backward

Anticipate outcomes

Never Give a Sucker an Even Bet

Be cautious of uneven information

Mixing Your Plays

Unpredictability is key

Unpredictability in game theory

Buffett's Dilemma

Using game theory to achieve a goal

Thinning Strategically

The art of selective elimination

The power of intransigence

To Lead or Not to Lead

When to follow and when to lead

The Hot Hand Fallacy

Don't chase streaks

Strategic decision making

Strategic Thinking

Outdo your adversary