Game Theory

In authoritarian regimes, leaders often secure prolonged control through oppressive tactics that prevent opposition from organizing or gaining momentum. From a game theory perspective, this strategy can be understood as a “fear-based stability,” where the cost of opposition is high, and the risk of repression discourages dissenters from taking action. In such regimes, individuals face a prisoner's dilemma: although collective action could increase the likelihood of challenging the ruler successfully, the first to oppose often suffers severe consequences if others do not join. This creates a situation where everyone prefers to avoid the risk, maintaining a Nash equilibrium in which silence and compliance are rational choices. This mutual inaction leads to a stable yet coercive equilibrium where the authoritarian’s rule remains unchallenged. ...

The Buddha says: If I don’t go to prison, who will? This way, the maximum collective benefit will be achieved.

Our trouble is not how to find happiness, but how to be happier than others.

This is a free-rider game. One party bears the corresponding cost, and both parties share the resulting benefits. Whether individual rationality and collective rationality conflict depends on the game’s rules. When A < 10, the collective should participate (or contribute). However, due to unequal income distribution, individuals are reluctant to contribute. To resolve this conflict, we should not deny individual interests (let the big pig press the button selflessly), but rather change the game’s rules (if the small pig doesn’t press, it eats a little less). Therefore, while free-riding, don’t forget to give something back to the other party. The willingness of the wealthy to be benevolent cannot exist without the approval (or “likes”) of the poor.

There is a clear lure. The path to the lure is one-way—you can enter, but you cannot exit (sunk cost). The harder you try to break free, the deeper you fall.

Don’t expect to buy it at a very low price. (Don’t expect to spend 100 to get 10000; you should just bid 9900) Two robbers passed a gallows. One sighed, “How great it would be if there were no gallows.” The other replied, “Are you crazy? Without it, others will come and rob us.” Quickly send the signal of “inevitable success.” (Like breaking the cauldrons and sinking the boat, tell others that I will get it even if it bankrupts my family) Only fight for the steamed bun, not for the spirit. Without the bun, the spirit eventually dies. (Be pragmatic; don’t let emotion get the better of you) High vision, far-reaching foresight. (Think three times before acting; you must be able to anticipate that this is a trap)

Everyone can fail; what’s important is realizing the mistake, cutting losses, and accepting the consequences. Focus on the future and don’t make the same mistake. Where there is silent cost, there will be a ten-thousand-yuan trap.

People who fall into traps usually have two motivations. One is the economic motivation, which is a rational motivation—the desire to minimize financial losses. The other is the non-economic motivation: the desire to regain face and punish the opponent. There are many such traps in life: For example, two deputy directors want to get promoted and compete by giving gifts. The gifts already given are sunk costs, which cannot be recovered unless you, as the deputy director, decide you don’t want to do it anymore. Another example is the game Zheng Tu (征途): this is a game that changed the landscape of online gaming. In an era where everything required clicking a card, it was permanently free to operate. When you try it for free for a while, you are quickly drawn into the game world. However, you gradually realize that if you don’t pay, you aren’t truly playing the game; you are being played by the game. Those “RMB players” (real-money players) who possess various luxurious equipment and high levels will crush you to the point where life is worse than death, making you feel your self-esteem has been completely trampled. So, in anger, you shout, “Isn’t it just RMB? I have it too!” and immediately purchase the full set of luxurious equipment, instantly leveling up, thereby completely defeating the previous humiliation and achieving a triumphant victory. ...

People who fall into traps usually have two motivations. One is the economic motivation, which is a rational motivation—the desire to minimize financial losses. The other is the non-economic motivation: the desire to regain face and punish the opponent. There are many such traps in life: For example, two deputy directors want to be promoted and compete by giving gifts. The gifts already given are sunk costs, which cannot be recovered unless you, as a deputy director, decide you don’t want to do it anymore. Another example is the game Zheng Tu (征途): this game changed the landscape of online gaming. In an era where everything required a point card, it was permanently free to operate. When you try it for free for a while, you are quickly drawn into the game world. However, you gradually realize that if you don’t pay, you aren’t really playing the game; you are being played by the game. Those “RMB players” (real-money players) who possess various luxurious equipment and high levels will crush you to the point of misery, making you feel your self-esteem has been completely trampled. So, you angrily shout, “Isn’t it just RMB? I have it too!” and immediately purchase the full set of luxurious equipment, instantly leveling up, thereby completely defeating the previous defeat and achieving a triumphant return. ...

You cannot use the reference point the boss gives you; instead, you must provide a reference point for the boss. For example, you tell the boss: “The place next door only sells it for 60 yuan.” The most extreme scenario is whether the boss can give it to me for free. You must push it back to the price point where the negotiation is about to break down. No movement, no price reduction.

The game ending is unrelated to the truth; the game rules determine the outcome. Even if [we] haven’t done it, lying is still the best choice, because lying might lead to immediate release.

It is impossible to make a decision in a vacuum, but the reference point can be controlled.

If you don’t give the other party a shared stake in two interests, they will assert their claim over your interest alongside those of others, and consequently dismiss you and leave.

Dig one pit and ask if you’ll jump; you say no. If two pits are dug, and asked which one to jump—the big one or the small one—you will most likely jump into the small one.

Under conditions of information asymmetry, the outcome of the game is not determined by the players themselves, but by what they believe others are thinking.

If your perceived foolishness makes the other party willing to cooperate with you, why wouldn’t you be happy about it?

No matter how hard you try, you can only achieve average profit levels. +++