Game theory offers many simple yet powerful tools for dealing with conflict. One of the most important is the minimax concept. Consider the possible outcomes of a situation; take the worst thing that can happen given each available option going in; and then make the decision that yields the best among those worst-case scenarios. That's the minimax --- the choice that maximizes the minimum possible result, or in other words, minimizes the maximum damage.

Minimax has nice mathematical properties; a classic and entertaining discussion appears in John Williams' book The Compleat Strategyst. For practical purposes, minimax is like an insurance policy. It guarantees that nothing utterly horrible will happen, but leaves open the hope of doing a bit better than expected. It's independent of the opposition, so it can't be faked out, bluffed, or intimidated. And minimax is stable, in that if all sides pursue their respective plans things quickly settle down so that no further changes are profitable to anyone.

In life, minimax-style worst-case avoidance isn't a bad strategy either. Most of the time swinging for the fence results in a strike-out. For every lottery winner, there are millions of losers, and the total amount paid out is far less than the money put into the pot. Few people become movie stars, professional athletes, or celebrities of any sort. Much better to practice a bit of sensible risk aversion, and focus on maximizing realistic possibilities. A big win can still happen, but if so it's just a bonus; nobody should count on it for anything important.

Sunday, September 05, 1999 at 20:36:05 (EDT) = 1999-09-05


(correlates: CelebrityTakeover, LearningFromAdversity, SurfaceWaves, ...)

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