Racing to the Bottom Holding the Top, Game Theory and You

Today's lesson is about the games that we play. We talk about Game Theory, but we're not talking about a little amusement, a simple diversion, but very certainly the difference between life and death, success and failure, riches and poverty.

You see the relationships between these opposed states aren't arrived at singularly. You can work hard, save, invest and struggle through as many advanced degrees as you can - and you might still be poor. Because Poverty, let us say as an example, is one side, or Axis of a continuum, and without co-operative Game Play, you will loose. Game Play you see is a method for getting along with people best, because the best interaction is one where everyone benefits equally.
The above image represents a classic system in Game Theory. This is important in economics because it explains, as with all economics, Human Behavior.

Here's the format of this lesson:

I - You're in the 11th grade and this is an economics course.

II - ODE standards and indicators - This lesson will help you learn something useful about personal finance that is appropriate for all job seekers and workers. If you're a disadvantaged worker - that is, if you lack collective bargaining and or are part of the working poor - this lesson can help you. This lesson is meant to teach you how collaboration and group planning/thinking will beat individual selfishness.

III - You will need: Access to the internet, a pen and a 3x5 index card.

IV - Procedures

1 - You're going to jail. Look at the person sitting next to you. You and that person have done a crime together. You're going to jail... Here I'll elaborate the scenario.

2 - Now we're bidding for a Grade. Write on your card the exact number of pages you're willing to write to get an A in this class. The highest number of pages submitted will get the A - while a scale sliding down will establish what grades everyone else gets. Answers and analysis to be posted on our class' wiki. Remember you each have a page set up to post questions and I expect to see acceptable comments made by each of you.

3- I'll give you another example, this is a real world situation from life that you can exploit and that you can learn from...

Liberty Ford TV Commercial Ohio Market @ Yahoo! Video

Notice the pricing as a point of sale? Here's what that means to you: These auto dealerships compete only on price, they are in effect racing to the bottom - each of them will outbid the other to get your business and deny it from the other, in this way - both dealerships make a very small potential profit, so you can use their lack of game play as a bargaining technique.

V - Now that the tally is in we can look at who will get an A. If you understand Game Theory you'll all have chosen wisely. If not, well, you might have committed yourself to more work than you'd rather do.

VI - Ideally students should realize that remaining unified and making collaborative choices yields a far greater return than acting for pure self interest.