Predicting the future with mathematics
Cover of Prediction
Game theory is an important application of mathematics. The central theme of Bruce Bueno de Mesquita’s new(ish) book Prediction: How to See and Shape the Future with Game Theory, is that it can be applied to give startling predictions within social areas such as politics. He claims that by applying a bit of game theory you can even change the outcome of negotiations or advance your career. He puts his money where his mouth is and makes predictions about the future. Some of these have come to pass since the first printing.
The first example in the book is excellent: How to get the best deal when buying a car. You can actually apply the method in many different transactions not just car buying and knowing it will pay back the price of the book many times over.
I love the idea of game theory. I tried (and failed) when I was an undergraduate to read von Neumann and Morgenstern’s seminal classic Theory of Games and Economic Behaviour. I would love to read a geat book written from the mathematical perspective but this isn’t it. There is not much mathematical theory in the book and even that is relegated to an appendix but to be honest for me it raised more mathematical questions than it solved.
Nonetheless, this is a great book which I enjoyed reading. Some extra diagrams would have been useful. The description of the probability of finding a sports drug cheat I think can be best described using a picture for example. Maybe I’ll draw one some time to show just how easy it is.
Ok, so I don’t think that this is the best book about Game Theory from a mathematical viewpoint. It was never intended as such (hence there is still a chance to write the book on Game Theory). This however is the best book I have read on the practical applications of Game Theory.
His TED talk gives a very good introduction to the material in the book: