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What do I love about: Think Strategically?
The key takeaway from this piece is- Looking ahead, reasoning backward, anticipating your rivals move. Every concept explained is built on this key principle. The writers have succeeded in illustrating previously complex theories to simple easy-to understand everyday strategies. Whilst it is obvious that the writers have an affinity for sports and politics, they still used some common example to further buttress concepts. I particularly enjoyed concepts like poison pill, white knight, golden parachute, brinkmanship, Zero- sum game, dominant and equilibrium strategy, compellent and deterrent threat, game theory, prisoner’s dilemma.
I recommend this book for individuals looking to improve their IQ and learn some life strategies. The book uses case studies and case study discussions to help you understand strategy better.
What do I not love about: Think Strategically?
This book is quite difficult to understand. But then I remember it is an advanced book on strategy.
Who should read: Think Strategically?
If you were ever curious about strategy and how to apply strategy to everyday dealings then this book is definitely for you.
Who should not read: Think Strategically?
No idea
Notes from Think Strategically
- There are ways to move second. You can imitate as soon as the other has revealed his approach (as in sailboat racing) or wait longer until the success or failure of the approach is known.
- Each person has to place himself simultaneously in both his own and the other guy’s shoes and then figure out the best moves for both sides. If I think that he thinks that I think…..The trick is to square this circle.
- Love is a dominant strategy.
- A dominant strategy is one that makes the player better off than he would be if he used another strategy, no matter what strategy his opponent uses.
- One misconception to dominant strategy is that the worst possible outcome playing the dominant strategy be better than the best outcome of some other strategy.
- The interest of the players in a game may be a strict conflict. One person’s gain is always another’s loss- Zero Sum Game.
- The surest way to prevent cheating is to make the punishment as big as possible. It should not matter how dire it is.
- A strategic move is designed to alter the beliefs and actions of others in a direction favorable to yourself.
- Strategic moves thus contain two element: The planned course of action and the commitment that makes this course credible
- A compellent treat is designed to induce someone to action. A deterrent threat is designed to prevent someone from taking action.
- One should strive for the smallest and the most appropriate threat that will do the job. Make the punishment fit the crime.
- Whenever a large degree of commitment is infeasible, one should make do with small amount and reuse it frequently. Homeowners and contractors are mutually suspicious. The homeowner is afraid of paying upfront and finding an incomplete or shoddy work. The contractor on the other hand is afraid that after they have completed the job, the homeowner may refuse to complete the job.
- When unpredictability is needed, it would be disadvantageous to move first.
- The rule should be that the expected punishment should fit the crime. Where the expectation takes into account the chance of being caught.
- The essential point is that it is not necessary to convert everyone just a critical mass.
- This is the dilemma of designing an ideal contract- How to combine efficient go-ahead decisions with the incentive to truthfully reveal private information about cost and revenue.
- How to stay ahead gets more complicated when the moves are simultaneous: prediction rather than observation is needed.