Game Theory and a Hypothesis on Thinking

3:43:00 AM



There are many different ideas about how human beings think. I spent the last few weeks writing papers and preparing for a behavioral microeconomics exam. Part of that process involved reviewing concepts that until a few months ago, were quite foreign to me. Behavioral science combines concepts from psychology, economics, neuroscience, and other fields to explore how human beings make decisions and it’s introduced me to a few different concepts about how people think. Economics particularly has a concept of ‘noise’: noise essentially is what happens when people change their decisions when presented with the same choices multiple times (if you were asked to choose between tofu and a steak, you might choose the steak four times and tofu once). Economists believe that once a choice is made, we ought to stick to that choice, behavioral economists and psychologists believe that’s not how humans actually think.

I tend to approach new concepts with what I call a brick-layering method. For example, when I’m introduced to a formula such as this: which is part of the quantal response equilibrium that measures the amount of noise in strategies chosen by players under game theory, I might start by thinking about the intuition behind the formula. What aspects of the topic does the formula cover? And then a while later I’ll come back to the formula and add an extra layer of depth, how would I apply the formula to certain problems, what do the answers mean? And then later on, I’ll add another layer, how does the formula accurately capture the real world. What would happen if I tweak certain aspects of the formula?  How intuitive is it?  How does it tie into my understanding of other aspects of game theory so far? etc.,

The brick layering method generally means I become more familiar with a concept over time, but it also means I (try) to take my time in developing a full and nuanced perspective on any issue. However, in the past months I watched how people around me assimilate information and realized some very smart people think in an entirely different way: they go deep immediately, almost like a digger, they take onboard all the information (what is the formula, how is it applied, what are its limits, to what extent is it a predictive model, will it only work in certain circumstances, etc) and then they sift. Thinking through everything, embracing aspects that are solid, discarding information that is not relevant, and settling on a streamlined understanding that is more concise and accurate than when they were first introduced to the concept. The ‘digging’ method of thinking feels like a faster, messier, and yet somehow still efficient way to understand a subject. Collating information first and then organizing it, as opposed to organizing information as soon as it is encountered and then adding more information to reinforce a framework as necessary.

How we approach thinking defines how we approach the world. You, like me, might prefer to extend knowledge slowly and constantly, or you might prefer to know as much as possible and then sift through everything. What’s interesting about both ways of thought is that they ultimately allow flexibility. Whether ruminating and expanding on an issue, or eliminating unnecessary information, no form of understanding has to be stagnant or polarized. We might make a decision now, yet reverse it in light of new information. Many great leaders I respect have taken this approach to thinking. Knowing that their opinions at one time only reflects their understanding up to that moment, and that such an opinion might grow or become more developed as they grow and as they develop. I think allowing ourselves the ability to change our minds is a powerful and freeing thing, regardless of whether it is a rational/ optimal thing to do.

This coming year, I hope we all get the chance to see the world in different ways, whichever method of thinking we tend to follow, and that we get to change our minds, have our ideas tested, our values reinforced, and come out with a more nuanced understanding of each other and our world.


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