Why Most Things Fail

Chapter 5 / Playing by rules

Мы не знаем рынка в котором продаём и покупаем.

Vernon Smith, Nobel Prize winner for economics in 2002, noted as much in his acceptance speech, when he stated perfectly frankly, ‘We do not understand why markets work as they do.’

Теория игр служит для планирования стратегии и прогнозирования в ситуации взаимного ядерного сдерживания. Интересный пример из жизни «ястребов» США.

Outside the world of business and economics, game theory might also help to illuminate military strategy. In the Cold War of the second half of the twentieth century, the US and the Soviet Union were playing a multi-layered game. Both powers were armed to the teeth with nuclear weapons. Curtis LeMay, head of the American air force, had stated that the Soviet Union could be reduced to cinders with six thousand nuclear warheads. Yet he wanted the money for ten thousand. At a formal hearing, an elected representative had the temerity to remind LeMay of his statement. His reply was curt: ‘Senator, I want to see those cinders dance!’

Chapter 6 / A game of chess

Experimental economics by Dan Kahneman and Vernon Smith radically defies modern economics and rational agent beliefs.

The 2002 Nobel Prize winners for economics, Vernon Smith and Daniel Kahneman, have both worked extensively on situations where agents either do not or cannot maximize. Rather than rely on a priori theorizing about how rational individuals ought to behave, they have carried out extensive empirical tests about how people really do behave. In so doing, they have created an entirely new field known as experimental economics. In the same way that computers have reversed previous beliefs about the outcome of chess games with certain combinations of pieces, experimental economics has altered, sometimes quite dramatically, our view of how humans actually behave.