Author: Adam Kucharski
Date read: June 2018
How strongly I recommend it: 7/10
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Summary & High Level Thoughts
Interesting, speedy read.
Tricking games can be close to impossible. When the weakest link is out of the game (humans), it’s even harder. But hacking systems can be insanely profitable.
If incentives are aligned, magic will happen. In the United States, horse tracks don’t discourage math-based betting syndicates. Quite the contrary – they go out and search for them, strike deals and hand out rebates if they place large enough bets. Why? Because they take a cut of the bets, not the winnings. If incentives are aligned, even Casinos will let you cheat.
Game Theory is a mandatory mental model.
You need to understand whether you are playing a zero-sum game or not. If it’s poker, you are. If you are trying to build a business, contrary to popular belief, you probably aren’t. Unless you are Uber (and even then) there’s probably room in your market for you and your competitors.
People aren’t logical. In 2003, the US senate stumbled upon a controversial proposal from the DoD: a “policy analysis market” that would allow traders to speculate on Middle East events. Biochemical attacks, assesinations, change in dictatorships, the whole nine years. The idea was that 9f anyone had inside info and tried to use it, the DoD could easily soot eh change in market activity. People were pissed. The economist pointed out that these agencies, by definition, already pay for information. So the moral money exchange isn’t much different.
Data isn’t everything. Numbers can be misleading. Take the case of italian defender Paolo Maldini. He barely made any tackles. By data, he would be considered a bad defender. But that’s because his positioning was superb. He didn’t need to.