Sunday, December 04, 2005

Game Theory - "it's a bust"

Martin Kihn, the author of House of Lies: How Management Consultants Steal Your Watch and Then Tell You the Time, has been investigating Game Theory, and guess what: It's a bust!

A generation of MBA students have been taught Game Theory, which on its own should be enough to discredit it, but unfortunately for its enthusiasts nobody in business uses game theory. Kihn and his 'Fast Company crew' checked it out:

Adopting our usual rigorous methodology, we set the following parameters. To count, an example must:

  1. be an actual business situation where somebody used the insights of game theory;
  2. have occurred within the past five years; and
  3. involve real, live, actual companies -- not governments, nonprofit organizations, or Russell Crowe.
The result: a lot of head scratching from the 'experts,' and a big zero in the box showing the number of times Game Theory has been used by businesses. [Hat tip Mises Blog]

Linked post: You Got Game Theory!

2 Comments:

Blogger Rick said...

I wonder how highly libertarianism would score based on how many governments employ that philosophy..

And I'll accept an answer 5 or 5000 years old with or without Russ.

12/05/2005 04:41:00 pm  
Blogger phil said...

Don't shoot me coz I'm only the messenger, but the Game Theory guys just won the Nobel Prize for Economics

http://www.theaustralian.news.com.au/common/story_page/0,5744,17531091%255E1702,00.html

12/11/2005 08:51:00 am  

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