Sunday, November 29, 2009

Game Theory

A long time ago I wrote a paper on Game theory for one of my PhD courses. Game theory was propounded by John Von Nuemann and Morgan Stanley in the late forties and made an amazing contribution in the field of economics. In my paper I put a slight slant of faith in it and it came back heavily marked with questions but I still managed to get an 'A' for that paper. To summarize the traditional thought among businesses is to maximize their profit in the market share and fight for resources,and controls over their operating internal and external environments. Game theory proposes that in business winning and maximization of profits is not the only way for market domination or ensuring longevity of the business but it is a combination of games that a Business/Organization plays of winning, losing, creating win-win situations and finally even creating lose-lose situations. This might sound confusing for the traditional school of thought but let me explain Nintendo the game console manufacturer has applied game theory since the late seventies and has not only ensured market dominance but high amount of cash reserves. Nintendo operates its game theory in the midst of the following components or players: distributors, suppliers, manufacturing inventory and competitors. Throughout the game Nintendo makes sure they are in control of each of the players or components in the market place. In the eighties when they saw retailers like Wal-mart holding lot of power, they zapped their power by under-supplying games and consoles in the market, resulting in a temporary loss for the company but guaranteeing a high demand was created in the marketplace. During this period of time the competition thought they were making short term quarterly profits but they were losing a strategic battle in the long run against Nintendo. Nintendo stays ahead of the curve by innovation, creating products that are not way ahead of competitors but have a slight differentiation in them making them a niche in the larger market place. With product innovations they release only a few of the features and every two years add on to the feature set of a console or a game thus giving the excuse of increasing prices. The release of the Nintendo Wii is an excellent example of again controlling the buying of the games through its console over the internet again zapping of the power of distributors and giving their customers the alternative of choice. They complete the cycle by creating an entire line of accessories sold separately from the game console. They know families play the game together or have friends over so when they sell the console they only sell one remote with it, the extra remote or remotes have to be bought separately. Nintendo is thus playing the game of controlling the supply chain and the demand chain by bending the ordinary rules of traditional business. No wonder A game console manufacture's profit was three times that of Sony corporation whic is into everything from all kinds of electronics to movies.

Now why am I rambling about business in faith based blog. Continue reading....
After writing about this, that evening I went to church and heard the speaker say how Jesus stood still when the woman with the blood issue touched his Tallith and got healed. Jesus is asking a surprising question "Who touched me?" The disciples tell him "Rabbi, you are surrounded by a thong of crowds and yet you ask ..who touched me?" (Paraphrase mine). Jesus knew who had touched him but He was making a point by bringing the attention to the lowest person on totem pole of the Jewish society of that time "the unclean woman". The woman steps forward and proclaims: "Its me Rabbi, I am healed by touching the helm of your garments". Jesus tell her, "Daughter of Abraham your faith has made you well, Go in Peace".

You may ask what the heck is the connection? Jesus came to save us from the ways of the world to follow Him as the only way to be saved from what I call the Matrix of deception. In the movie Matrix Morpheus meets Neo at the assigned location as they want to free him from the Matrix but still Neo has to make the choice. Here is the clip.

The Blue Pill Or The Red Pill from Mathai on Vimeo.

The clip is fascinating isn't it? I am not saying the world is some computer program or some big illusion far from it, but there is some truth in what Morpheus is saying there is a tug in each of our souls as to there is something more. The conversation ends in Morpheus offering the blue pill and the red pill. If he takes the blue pill he wakes up and goes about his life as if nothing happened and if he takes the red pill he will know how deep the rabbit hole goes. We all know what pill Neo chooses, how he is freed from the matrix and how he comes back with the free to help others to be rescued out of the Matrix. It is interesting to me that Neo and his friends can come back in the Matrix but are no more bound by the rules of the Matrix, they can bend the rules of the Matrix and fight the Agents and rescue others, but at the same time they can also get hurt and even killed in the process. Fascinating!

Jesus came to do the same, he rescued us from our eternal damnation of separation from God, brought us out of the clutches of Satan and now sends us back into the world but this time we are armed and can bend the rules of the game. In losing life we gain it, we will advance the kingdom of heaven with victory or loss no matter what, we are no longer slaves but more powerful than we can imagine with the power of Christ in us. I hope you are connecting the dots now, game theory, matrix and the reason to our faith. The woman with the blood issue was not a wanted member of an esteemed congregation but she knew if only she could touch his garments she would be healed, she believed in changing the rules of the game, the touch could save her, she braves the crowds, makes her way through and gets what she wants. Nintendo loses the game sometimes to seal the final victory.

The agents are coming....the phone is ringing..."Run Neo Run"...Oh No...wait..."What is he doing?" He is not running...he stops to face the agent, to fight and to bend the rules of the Matrix.


Joe said...

I never thought of it this way. Cool way to relate faith and game theory. Good Post!

Peter said...

Jesus said "Be shrewd as a serpent and innocent like a Dove". Your post reflects business principles in Faith or I should say Christian principles in Business.

Sam Kurien said...

Thanks Peter I don't see the secular being separate from sacred. The Sacred needs to come in an make the secular also holy.

John Conaway said...

This reminds me of the death of Aslan in The Lion the Witch and the Wardrobe. Aslan submits to the White Witch and is executed, and all seems lost. But Aslan knew there was a "deeper magic." He acted on the basis of what he knew, not what he was experiencing. Isn't this what Paul means when he says we are to walk by faith and not by sight? Sight is seductive. It leads too quickly to certainty. But certainty is static, frozen. Truth is living and active. We learn a bit, act on that, and learn more. We never arrive, never figure it out completely. But that's what makes life an eternal adventure.