The Predictioneer's Game: Using the Logic of Brazen Self-Interest to See and Shape the Future

by Bruce Bueno de Mesquita

Book Overview

Bruce Bueno de Mesquita is a master of game theory, which is a fancy label for a simple idea: People compete, and they always do what they think is in their own best interest. Bueno de Mesquita uses game theory and its insights into human behavior to predict and even engineer political, financial, and personal events. His forecasts, which have been employed by everyone from the CIA to major business firms, have an amazing 90 percent accuracy rate,...

• Format: Paperback
• Language: English
• ISBN: 081297977X
• ISBN13: 9780812979770
• Release Date: October 2010
• Publisher: Random House Publishing Group
• Length: 288 Pages
• Weight: 0.50 lbs.
• Dimensions: 0.6" x 5.3" x 8.0"

Customer Reviews

Game theory made relevant.

This book is important. Paging through game theory books shows the same tired simultaneous game payout matrices and pages devoted to marveling at the wonder of it all. Nowhere else can you find a comprehensible case for why a non-specialist should care about GT. The author provides engaging and useful tales of applying GT models to negotiation and decision making. Many reviews here have blasted the believability of the author's scenarios and analyses. I don't doubt his veracity at all, but I'm not sure that it really matters. The stories and example solutions demonstrate methods to formulate and state complicated problems to make them amenable to rational solution. Real political, economic and social problems are big, sloppy and hard to capture in computational form. The author shows how we can abstract the salient points of a problem, phrase the issues quantitatively, assign notional numerical values to the key inputs and interpret computational results. Details of the test cases, the game-theory mathematics, or verification of the result are not that important. What matters is that the author systematically shows us how to think about complex problems by simplifying them enough to fit into an analytical framework, whether that framework is GT, Beyesian belief nets, decision theory, or a pair of dice is almost irrelevant. Finally, the flamers who decry the lack of detail on the author's model are simply lazy. The utility function algorithm is published in his book "Predicting Politics". The description there enabled me to quickly code up an implementation that generated outputs similar to his. Working examples of newer versions of his models are posted online. I'm sure book editors can make a good case for keeping scary equations our of general-circulation books. References are there for a reason; if you want more detail the author points the direction.

The Future's Not Here Yet, Man

If you can predict the future accurately, you have it made - untold riches, power, and happiness are yours. This is the reason that humans have invested so much money and care into crystal-gazers, palm-readers, or astrologers, even though none of them have any demonstrable record of success. Now comes Bruce Bueno de Mesquita who predicts the future in a different way. He uses computers, and he uses the mathematics of game theory, and if you believe the anecdotes and case studies he presents in _The Predictioneer's Game: Using the Logic of Brazen Self-Interest to See and Shape the Future_ (Random House), he has sufficiently mastered fortunetelling so that he does have the riches, power, and happiness denied to those of us who are stuck just guessing what might happen. In a way, Bueno de Mesquita's book is self-promotion. In addition to being a professor of politics, he has a consulting service and if his book succeeds, he not only will get royalties, but his firm will get more prestige and more clients. He would easily admit that his own future-predicting schemes would show exactly why he is making these moves in his own game just this way. For the rest of us, his book provides an interesting introduction not just to game theory but to its applications in the real world. (For instance, he provides a nifty method for buying a new car that takes advantage of dealers forced to compete with each other.) Bueno de Mesquita would not mind if we attributed to him the sorts of base motives such as money and prestige. He is only out for number one, but in his view, so is everybody: "The view of people as cold, ruthless, and self-interested is at the heart of game-theory thinking." Even Mother Teresa is analyzed here, and the author archly shows her motivations to be fully analogous to those of the thugs who flew planes into the World Trade Center. It's all understandable from self-interest, and that's what game theory is about. The author models games (and "games" here means a wide variety of activities between nations, or lawyers, or corporations) based on essential characteristics; it turns out that culture and personality traits are not essential in his model. What really matters are things like identifying every player who is involved in trying to influence an outcome, what each player claims to want, how important each player rates the need to solve the problem, and assessing the ability of each player to persuade others to change positions. The model can be fairly simple if there are only a couple of players, but usually there are far more than that, and this is where computers are essential. The author's firm has proprietary algorithms to handle the millions of comparisons (there is some controversy that although Bueno de Mesquita wants to think of what he does as science, the algorithms remain secret and beyond scientific evaluation), and the algorithms work with remarkable success, at least as described by the author. He does give

brilliant enlightenment with a possibility of boredom

back in the 1960s, i think it was a psychologist by the name of paul meehl who wrote that statistical prediction of psychological outcomes was superior to clinical opinion. 45 years later, we're now accepting this finding and applying it to some really critical international issues. this is an outstanding book, it is very well written. it is often drier than the sahara, but, it is also interspersed at times with humor. the brilliance of this approach, and the proven outcomes of this approach, make it very well worthwhile reading. i urge policy makers, diplomats, military leaders, etc. to read this book. the approach is one of the most novel that i've read in decades. i give it an "A+".

Finally there's science in Political Science!

When I first heard about this book I laughed out loud. Everyone knows that negotiations are complex things and so dependent upon individual personalities that it's impossible that a mathmatical model could even come close to predicting the outcome. I started researching the book and the author to debunk it to a friend who was touting it. Imagine my surprise when I found out it's from a top name at a top university (NYU) and not some new age quack. I happen to be an in-depth numbers guy who deals with lots of data all day, I happen to have a degree from NYU and I've taught myself such statistic heavy things as Black-Scholes so once I saw this guy was for real I was quite interested. Once I listened to the book (I bought the audio book before buying the hardback) I decided I had to try the model in the book for myself on a limited scale to see if it was for real. I was due to have a discussion with my managers about how to handle some outside feedback so I thought this would be the prefect opportunity for a test. I fed the data into the model and it said that initially most of my managers would back me strongly but that a dissenting voice would then emerge, my managers would rally around it and I would end up with an agreement far below what I wanted. Darned if that isn't exactly what happened even though the model had warned me and I'd tried to bend things so it wouldn't happen. That sold me. I've used it on several things since then and it's never failed me. I can say that even had the predictions not been right the model provides a great framework for thinking about the players and what might happen. I've been through a LOT of negotiations and this model allows me to feel like a have a clear, coherent, well thought out and supported plan. That alone is hundreds of times more valuable than what I paid for the book. I would recommend this book for anyone. The book itself explains the underpinnings and uses of the model in easy to understand detail. I will say that running your own predictions isn't for the faint of heart. Even with the tool provided on the website getting good information requires a really strong understanding of statistics and an ability to read and understand data. But this book isn't aimed at the die hard statistician looking to make their own predictions, it's aimed at people who want to know what things are shaping the world and if my experiences are any indication Bruce Bueno de Mesquita is, and will continue to be, a large factor in shaping the world.

The most intriguing and accurate political science model

Please note, this book introduces the author's model for a general audience. If you seek greater math disclosure read his equally excellent PREDICTING POLITICS. The author, a political science professor at NYU built his reputation developing Game Theory models that predict foreign affairs outcomes with a 90% accuracy as confirmed by a publicly released CIA study. This is amazing given that Game Theory is not effective at forecasting (Kesten Green/International Journal of Forecasting). The reason why the author's forecasting performance is so good is that he often uses many quantitative methods beyond Game Theory. For instance, his model to predict company fraud is a Logit Regression model. His work on the Cold War seems like a combination of Discriminant Analysis and Monte Carlo Simulation. His Global Warming regulation projection seems also based on Monte Carlo simulation. When he first developed his model in 1979, he was shocked that it would often contradict his own expert opinion and most often turn out right. The Defense Department made him predict 17 different foreign negotiation issues. His model got all 17 outcomes right! He states that a computer can readily grasp what no human mind can because his model can capture readily all the layers of information being traded among decision makers. With just 10 players, this number of info exchange is already 10 factorial or 3.6 million exchanges. In chapter 4, when dealing with North Korea nuclear containment negotiation he explains the underlying basics of his predictive model. He states his model needs only four inputs (converted from English into quantitative scores) to predict an outcome: 1) The relevant players influencing the outcome; 2) The players' position on the issue (No = 0, Yes = 100); 3) How much they care about the outcome (salience; does not care = 0, cares a lot = 100); and 4) How influential they are (with an Influence weight). To figure the answers to the above questions, you talk to the relevant experts or research the media (The Economist, NY Times, etc...). Regarding the North Korea situation with 6 defined potential outcomes, the author first generates a baseline forecast as shown in Appendix I. He calculated the weighted average position of all players that came out to 60 corresponding to "slow reduction in nuclear development and capability in exchange for U.S. granting diplomatic recognition." To refine the estimated position of 60, he makes manual adjustments reflecting minute shift in players positions. And, he reruns the numbers until all realistic change in players' positions are accounted for. And, this gives him how a position on an issue evolves over several rounds of negotiations. He has used his model in a wide range of circumstances including: foreign policy negotiations, company mergers, company fraud, and litigation. And, the related predictions were surprisingly accurate. The author is quite a historian. His analysis of histo