41. The Strategy Conflict | Thomas C. Schelling | PodNu Podcasts & Book Insights

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Let's imagine. One day, you become rich, maybe you immigrate to the United States. You buy a big house. Then, you want to learn about how Americans buy guns, so you buy a gun for self-defense.

Well, one day, you fell asleep but heard something wrong downstairs. You go down and see that a thief is stealing from you. Then, you see the worst thing is that the thief has a gun in his hand. But don't worry, you have a gun too!

Now, the two of you look at each other. You both have guns. What will you and the thief do? What possibilities are there for the two of you?

The first is that you both shoot at the same time, but both lose out.

Or, you could compete to see who is the fastest to shoot first and kill their opponent.

There is another option, not to make a move at all. The two of you put your guns down slowly and quietly, as if nothing happened, and then walk away so everything ends up being fine. This is the best ending.

In this case, the complicated part is that we always try to guess the motives of the other party.

For example, if I'm the homeowner, I must guess if the thief is worried that I'm going to shoot him. In that case, the thief has to defend himself. The best way to defend himself is to strike first.

The thief would likely think the same way. He also wants to strike first. I can assume that the thief may want to shoot first, and the thief assumes the same of me at the same time.

Well, the problem is complicated. Both sides assumed. This is the kind of situation that we can explainusing "Game Theory.” This involves two people. We have some potential conflicts of interest: either you win, or I win. Maybe we can both win. Or maybe we both lose. How can we explain this situation? Are there any rules to follow? Is there a solution to this? That's what Game Theory explores...

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