Bruce Mesquita - The Predictioneer's Game

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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, and in this dazzling and revelatory book he shares his startling methods and lets you play along in a range of high-stakes negotiations and conflicts.
Revealing the origins of game theory and the advances made by John Nash, the Nobel Prize—winning scientist perhaps best known from A Beautiful Mind, Bueno de Mesquita details the controversial and cold-eyed system of calculation that he has since created, one that allows individuals to think strategically about what their opponents want, how much they want it, and how they might react to every move. From there, Bueno de Mesquita games such events as the North Korean disarmament talks and the Middle East peace process and recalls, among other cases, how he correctly predicted which corporate clients of the Arthur Andersen accounting firm were most likely engaged in fraudulent activity (hint: one of them started with an E). And looking as ever to the future, Bueno de Mesquita also demonstrates how game theory can provide successful strategies to combat both global warming (instead of relying on empty regulations, make nations compete in technology) and terror (figure out exactly how much U.S. aid will make Pakistan fight the Taliban).
But as Bueno de Mesquita shows, game theory isn’t just for saving the world. It can help you in your own life, whether you want to succeed in a lawsuit (lawyers argue too much the merits of the case and question too little the motives of their opponents), elect the CEO of your company (change the system of voting on your board to be more advantageous to your candidate), or even buy a car (start by knowing exactly what you want, call every dealer in a fifty-mile radius, and negotiate only over the phone).
Savvy, provocative, and shockingly effective, The Predictioneer’s Game will change how you understand the world and manage your future. Life’s a game, and how you play is whether you win or lose.

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2. Bruce Bueno de Mesquita, “Measuring Systemic Polarity,” Journal of Conflict Resolution (June 1975): 187-215; and Michael F. Altfeld and Bruce Bueno de Mesquita, “Choosing Sides in Wars,” International Studies Quarterly (March 1979): 87-112.

3. EUGene’s data can be accessed at http://www.eugenesoftware.org/.

4. See Bruce Bueno de Mesquita, “The End of the Cold War: Predicting an Emergent Property,” Journal of Conflict Resolution 42, no. 2 (April 1998): 131-55.

Chapter 9: Fun with the Past

1. See Xenophon, Hellenica , Book VI, Chapter IV, downloaded from http://www.fordham.edu/halsall/ancient/371leuctra.html).

2. Edward Kritzler, Jewish Pirates of the Caribbean: How a Generation of Swashbuckling Jews Carved Out an Empire in the New World in Their Quest for Treasure, Religious Freedom—and Revenge (New York: Doubleday, 2008).

3. Niall Ferguson, The Pity of War: Explaining World War I (New York: Basic Books, 2000).

Chapter 10: Dare to Be Embarrassed!

1. See my TED talk at http://ow.ly/2gFz for my predictions about Iran’s nuclear program.

2. The Algiers Accord, signed in 1975, was supposed to have resolved Iraq-Iran border disputes, such as over control of the Shatt al-Arab River near Basra where the river defines the boundary between Iran and Iraq. Despite the agreement, Saddam Hussein’s Iraq attacked Iran six years later, beginning a war that lasted for eight years. The border area remains a source of conflict while the Algiers Accord provides the legally—but not strategically—binding terms for delineating the boundaries of Iran and Iraq. As we know, promises are not the same as commitments, and nothing could be truer in the history of relations between Iran and Iraq.

3. A related analysis indicates that Tehran’s mayor, Ghalibaf is gaining in power. The next Iranian presidential election, though looking very close in my analyses, seems to give a small edge to Ahmadinejad. His power decline is more substantial after the election than before.

4. The patterns of political change shown here arise as well in analysis I did using completely different data on Iran. That gives me considerable confidence that they accurately reflect changing influence in Iran. For a portion of those other analyses see my TED talk at http://ow.ly/2gFz.

Chapter 11: The Big Sweep

1. The text of Lateran II can be found at www.fordham.edu/halsall/basis/lateran2.html.

2. Raoule Van Caenegem, The Birth of the English Common Law (Cambridge: Cambridge University Press, 1988): 64.

3. Emmanuel Le Roy Ladurie, Times of Feast, Times of Famine (New York: Doubleday, 1971).

4. George W. Downs, David M. Rocke, and Peter Barsoom, “Is the Good News About Compliance Good News for Cooperation,” International Organization 50 (1996): 379-406.

ABOUT THE AUTHOR

BRUCE BUENO DE MESQUITA is Julius Silver Professor of Politics at New York University and a senior fellow at the Hoover Institution at Stanford University. A specialist in policy forecasting, political economy, and international security policy, he received his doctorate in political science from the University of Michigan in 1971. Bueno de Mesquita is regularly identified as one of the most influential academics in the United States in the arena of foreign policy. He is the author of fifteen books and more than one hundred articles as well as numerous pieces in major newspapers and magazines. He has also appeared on the Today show, ABC, NBC, CBS, and Fox News, Bloomberg TV, and al Jazeera International, as well as television broadcasts in Brazil, China, Korea, the Netherlands, and elsewhere. His previous book, The Strategy of Campaigning , co-authored with Kiron K. Skinner, Serhiy Kudelia, and Condoleezza Rice, was published in August 2007. Bueno de Mesquita has been and is an adviser to the American government on national security matters and to numerous corporations on questions related to mergers and acquisitions, litigation, regulation, labor-management relations, and contract negotiations. He is a general partner in Mesquita & Roundell, LLC, a consulting firm focused on government and business applications of his game-theory models. He lives in San Francisco and New York City.

Copyright © 2009 by Bruce Bueno de Mesquita

All rights reserved.

Published in the United States by Random House, an imprint of The Random House Publishing Group, a division of Random House, Inc., New York.

RANDOM HOUSE and colophon are registered trademarks of Random House, Inc.

Library of Congress Cataloging-in-Publication Data

Bueno de Mesquita, Bruce.

The predictioneer’s game: using the logic of brazen self-interest to see and shape the future / Bruce Bueno de Mesquita.

p. cm.

eISBN: 978-1-58836-908-6

1. Game theory. 2. Economic man. 3. Self-interest. I. Title.

HB144.B84 2009

303.4901′5193—dc22 2009005686

www.atrandom.com

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