This was posted on a site I frequent, it was authored by W. Ben Hunt, PH.D. He is the author of Epsilon Theory and Chief Risk Officer for Salient Partners, an Asset Management Company in Houston, Texas managing 22.1 Billion in capital. You can read the original here. I am copying the whole thing because to try to just except will not do it justice.
Ebola And Calvin the Super Genius by Salient Partners
People think it must be fun to be a super genius, but they don’t realize how hard it is to put up with all the idiots in the world.
? Bill Watterson, “Calvin And Hobbes”
Here is the most fundamental idea behind game theory, the one concept you MUST understand to be an effective game player. Ready?
You are not a super genius, and we are not idiots. The people you are playing with and against are just as smart as you are. Not smarter. But just as smart. If you think that you are seeing more deeply into a repeated-play strategic interaction (a game!) than we are, you are wrong. And ultimately it will cost you dearly. But if there is a mutually acceptable decision point – one that both you and we can agree upon, full in the knowledge that you know that we know that you know what’s going on – that’s an equilibrium. And that’s a decision or outcome or policy that’s built to last.