I listened to an interesting podcast today, exploring the game Rock, Paper, Scissors, prediction patterns and game theory.
Being clever isn’t an effective way of winning, as people are rarely perfect decision makers. The Nash equilibrium is only relevant to domains with perfect decision makers. So it is important to consider the choices of others.
In the podcast, it was mentioned that from large datasets:
“The biggest chunk of people will think one step ahead, the next biggest chunk of people will think totally randomly, the next biggest chunk of people will think two steps ahead, and a small number of people will go beyond two steps.”
It also considers crowds and groups influencing decisions.
Link to the podcast: Rock, Paper, Scissors (BBC)