Answer the following question then I will be needing feedback on another post..
I need support with this Economics question so I can learn better.
Please respond to the following prompt:
In this life it is often the case that achieving our goals depends not only on what we do, but also on what others do. Therefore in order to achieve our goals, it is often optimal to try to predict what others will do, and to incorporate these prediction into our own strategies and decisions about what actions we should take to maximize the likelihood of achieving our goals. The applications of these ideas are limited only by our imagination, which makes game theory a powerful tool that can be applied in many parts of our lives. For example, I have used game theory ideas and the power of incentives as guiding principles for job seeking, obtaining companionship (watch “A Beautiful Mind” for some ideas), getting discounts on purchases, and getting my father to comply with my ideas, just to name a few.
In this chapter’s discussion, please describe a situation in real life in which you had to account for someone’s reaction to your behavior when choosing how you would behave.
For example: Many years ago I coached basketball. On my team there was one player that was clearly better than everyone else. I knew he was the best, the team knew he was the best, and worst of all, he knew he was the best. As the coach, my objective was to get the maximum effort out of him and the rest of the team in order to maximize the chance we would win. I tried to think about what I could do to achieve this goal…
Basically I was thinking about how he would react based on how I and the team treated him. Although he was the most talented player, he was arrogant. Often times arrogant folks feel that they don’t need to try as hard as others, and I knew that if I acknowledged that he was the best, that I would not get his best effort. So instead of making him a starter on the team, I had him start on the bench for the first few games. This made him feel like I didn’t think he was one of the best 5 players, and as a result he worked extremely hard for the rest of the season. When the rest of the team saw our best player working as hard as possible, they worked as hard as possible, and I knew I was getting the most out of the team. We went on to win the league championship.
This strategy could have backfired on me. It was possible that I would lose credibility with the team for not starting our best player, but it ended up working out. Remember, especially when outcomes depend on other people, it is possible to make the right decision and have it not work out, or to make the wrong decision and have it work out in your favor. But this doesn’t change what the right and wrong decisions are –it is optimal to “play the percentages”. We should judge ourselves based on what we put in rather than what comes out… often times all we can control is our effort and attitude.
Answer the following question then I will be needing feedback on another post.