Game theory for a better world
- 2. Game theory for a better world Gendry Morales
- 3. think sharp elabor8 Gendry likes… * Percentages are indicative only and based on about 5mins of analysis human sciences nerdy stuff peace, love and harmony technology
- 4. think sharp elabor8 Game theory Gamification Changemaking Metrics & KPIs A first principles style mathematical analysis of people’s strategies Game mechanics in non-game environments
- 5. think sharp elabor8 John Von Neumann & Oskar Morgenstern In 1940s the book Theory of Games and Economic Behavior established game theory as a field of study. John Nash Expanded the application of game theory, introducing mutual consistency of players strategies
- 6. think sharp elabor8 Game: Any set of circumstances that has a result dependent on the actions of two of more decision makers ("players") Players:A strategic decision maker within the context of the game Strategy: A complete plan of action a player will take given the set of circumstances that might arise within the game Rules: the information and instructions given Payoff: The payout a player receives from arriving at a particular outcome. The payout can be in any quantifiable form, from dollars to utility Equilibrium:The point in a game where players have made their decisions and an outcome is reached.
- 7. think sharp elabor8 Let’s play a game Choose a number between 0 and 100. The winner is the one who guesses 2/3 of the average of all the other numbers chosen. I’ll give you a moment to think about it the number you’ll choose.
- 8. think sharp elabor8 LET’S ANALYSE YOUR STRATEGIC THINKING
- 10. think sharp elabor8 how about I guess 50 while my brain catches up to this question - that philosoraptor is so funny - it’s half of 100 and it’s a nice round number
- 11. think sharp elabor8 hang on, if everyone does that then I need to guess 2/3 of that average. 2/3 x 50 = 33
- 12. think sharp elabor8 but if everyone does that too then i’ve got to guess 2/3 of that. 2/3 x 33 = 22 this is starting to get a bit tricky
- 13. think sharp elabor8 …let’s wait while some people do a few more of these 2/3s sums…
- 14. think sharp elabor8 wait a minute if I keep doing this i’ll end up at 1 or even 0. that’s it, i’ve got it! the answer is 0
- 15. think sharp elabor8 or is it? how smart are these people, are they thinking like me (hmmm, let’s look around the room). Gee I don’t know, how about 5
- 16. think sharp elabor8 Hilarious blog kinda thing with stick figure cartoons They ran this same game with their readers. There were a total of 5,101 reader guesses. Let’s look at their data
- 18. think sharp elabor8 Start here End here
- 19. think sharp elabor8 illogicalslightly strategic almost there using iterative elimination of weakly dominated strategies 1s & 0s pure strategy nash equilibrium hot pink is a winner!
- 20. think sharp elabor8 A bit of theory and jargon
- 21. think sharp elabor8 The Nash equilibrium is a solution concept of a non-cooperative game involving two or more players in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only his or her own strategy. A pure strategy provides a complete definition of how a player will play a game. It determines the move a player will make for any situation he or she could face. A mixed strategy is an assignment of a probability to each pure strategy. Dominance A strategy is strictly dominant if it strictly dominates every other possible strategy. A strategy is weakly dominant if it dominates all other strategies, but some (or all) strategies are only weakly dominated by it. A strategy is strictly dominated if some other strategy exists that strictly dominates it. A strategy is weakly dominated if some other strategy exists that weakly dominates it
- 22. think sharp elabor8 People aren’t always logical Put yourself in other people’s shoes, think about their strategy then develop your own and iterate a lot until you get to the equilibrium
- 24. think sharp elabor8 Game theory Gamification Changemaking Metrics & KPIs The design of Metrics and KPIs and their impact on behavior change in Software Delivery
- 25. think sharp elabor8 Metric – Story Points Velocity Rules:Create a burn up chart showing your actual team velocity vs estimated so that you can track and improve progress and estimation. Strategies: Reaches a Nash Equillibrium nicely Dominance Pretty Good? Review and retro ✔ ️ ✔ ️ Collaborate more ✔ ️ ✔ ️ Improve and try harder ✔ ️ ✔ ️ Players:Just the team, no other players allowed
- 26. think sharp elabor8 Metric – Story Points Velocity Rules:Track team velocity, but some new players assume meeting or exceeding points is winning and want to make it a metric Strategies: Dominance Pretty Good? Some players ask for velocity targets to be met ✔ ️ Nup In response team meet targets by bloating their estimations ✔ ️ Nup Players:The team, plus managers and people a bit further removed from the team and agile.
- 27. think sharp elabor8 Payoffs: represent the motivations of players. Payoffs may represent profit, quantity, "utility," or other continuous measures (cardinal payoffs), or may simply rank the desirability of outcomes (ordinal payoffs).
- 28. think sharp elabor8 bonus & incentives
- 29. think sharp elabor8 Metric – Chasing Value Rules:Show your benefits velocity, estimating and forecasting ROI, customer growth etc, then showing the actuals. Strategies: Iteratively adding better strategies Dominance Pretty Good? Reducing cycle times ✔ ️ ✔ ️ Learning how to deliver more value ✔ ️ ✔ ️ Test benefits earlier ✔ ️ ✔ ️ Players:Team members and people outside the team. To be sure, include the people who monitor the actuals already.
- 30. think sharp elabor8 Metric – Chasing Value Rules:Show your benefits velocity, estimating and forecasting ROI, customer growth etc, then showing the actuals. Strategies: Payoff:competitive funding Iteratively adding better strategies Dominance Pretty Good? Reducing cycle times ✔ ️ ✔ ️ Learning how to deliver more value ✔ ️ ✔ ️ Test benefits earlier ✔ ️ ✔ ️ Players:Team members and people outside the team. To be sure, include the people who monitor the actuals already.
- 31. think sharp elabor8 Not everything that counts can be counted and not everything that can be counted counts - Albert Einstein
- 32. think sharp elabor8 Metrics that can create good games • Reduce Cycle time • Increase Throughput • Predictability in meeting Sprint goals • Stakeholder/PO/Customer Satisfaction • Benefits velocity
- 33. think sharp elabor8 Metrics that create dodgy games • Get the status green (red on the inside) • Meet the go live date (leave out the quality and scope) • Decrease the number of defects found (lack of transparency) • Emphasising actuals, money spent (sunk cost fallacy… Vinh Pham)
- 34. think sharp elabor8 Notice the games being played See other people’s strategies & think a few more steps ahead Nerd it up with game theory & design better games, for a better world