Tuesday, January 12, 2010

The Predictioneer – Book #8

51Mp8N23MUL._BO2,204,203,200_PIsitb-sticker-arrow-click,TopRight,35,-76_AA240_SH20_OU01_[1] I’m not sure how this book got on my radar, but it turned out to be fairly interesting. It’s written by a professor at Harvard that uses Game Theory and readily available information about the world to both predict what will happen in a general sense, and to guide his consulting clients to make decisions based on those predictions.

It’s an interesting idea, kind of unbelievable, and smacking of the way predictions are made in Foundation. However as I read, and learned about both big predictions on the world stage, as well as small ones in a lawsuit, it seems that there is possibly some value and truth here.

The book talks about using insights into how people behave, along with good guesses about their beliefs, to simulate how they behave in rounds of negotiation. By simulating their interactions, and even randomly shocking the system, Prof. de Mesquita seems to be able to do a good job of predicting outcomes. Not exact dates or times, but general events, like if I offer to do X instead of holding out for Y in a lawsuit, what is likely to happen from the other side. Or how can North Korea be convinced to shelve nuclear armament plans? How can Israel and Palestine find peace?

It tends to delve into the bigger world stage issues, but it’s also very current, having been completed in the summer of 2009. If you are curious about how BI could help, and how game theory could be used, it’s worth a read. No technical details, but enough information to pique your interest.

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