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By now, you're probably having recurring nightmares about rolling dice...

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and flipping coins. But what if those dice and coins had minds of their own?

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Well, in some casinos, maybe they do. But you have a mind of your...

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own, so when it comes to making decisions and anticipating the decisions of others,

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you can't just plug yourself into a calculator to coem up with a set of...

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odds. Instead, you need to have a way to analyze what others want, how...

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they're probably gonna attempt to get it, and what your optimal action...

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is to make sure you get what you want instead. Because...

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who cares about the other guy, really? Right. So...

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say you and your friend go into a grocery store, and you both need to pick up...

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milk, eggs, and twinkies. You decide to make it interesting. Whoever's the...

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last one out of the store is a rotten egg, and has to eat one. Well, there's...

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some things to consider here. The quickest path is twinkies first, eggs,

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then milk, then to checkout. But this grocery store runs out of milk...

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all the time, and both you and your friend know that, so maybe the best bet is to grab the milk...

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first so your friend doesn't get the last one. Or is that his plan and you...

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should just stick with option A? Well, the method behind making this sort of decision is...

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called Game Theory, and it's the branch of math that deals with picking...

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outcomes when there are multiple factors at play, each with a different...

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goal. Like, when you and your friends are playing monopoly, or flag football.

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Or, well, any sort of game. Which is where it gets the name "Game Theory."

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Totally didn't see that coming, right? Game Theory wouldn't be of much use...

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if all it did was help you win at Risk. Fortunately, there are some much...

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bigger-scale games out there, like economics, psychology, politics.

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You may not be placing a pawn on "Start," and rolling a die,

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but you are trying to win something. And Game Theory can help you do it,

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by telling you the ideal moves to make that will benefit you and hurt others.

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That's pretty cutthroat, but you really hate to lose, right? Let's say...

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you and your friend Larry are back-to-back, and playing a game in which you have...

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to guess whether Larry is smiling or frowning. Well,

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if you guess that he's smiling and he is, you get five bucks. If you guess that he's smiling...

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when he's actually frowning, you have to pay him a dollar. If you guess that Larry's...

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frowning, when he's actually smiling, you lose four dollars. And if he's frowning...

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and you guess correctly, he'll give you seven dollars.

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Got all that straight? Well, since there's no way to know whether Larry's smiling or frowning,

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you'll want to figure out which guesses earn you the most money. Game Theory...

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allows us to set up a chart to organize all these outcomes, which will help...

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us develop the best guessing strategy for you, and the best smiling...

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or frowning strategy for Larry. As you can see, Game Theory, despite the name, is...

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still math. It uses all kinds of numbers and equations and matrices...

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to show the strategies that should be used to maximize our advantage...

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and minimize our opponent's. Aww, and you thought we were just gonna have fun.

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