Biases and Knowledge Gaps In Game Theory and Geopolitics

Sections in this Piece:

1) Introduction

2) Biases and Knowledge Gaps in Game Theory

3) Biases and Knowledge Gaps in Geopolitics

4) Do Some Leadership Structures Contribute To More Biases and Knowledge Gaps?

5) Cycles of Leadership and Empires – Can It Ever End?

6) The Psychology of The Nash Equilibrium - Do They or Don’t They Exist?

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There are some elements of life on Earth that some of us understand while others don’t. Then again, there are some aspects nobody understands at all. Any area of information or understanding that is missing or incomplete is referred to as a knowledge gap. They are one of the key reasons that collaboration in working with others is vital to success. We work better in teams to plug our knowledge gaps.

Photo by Kelly Sikkema on Unsplash

We also exhibit pre-set biases that originate from our past. This could be our environment, our upbringing, or our education that influences our biases for example. But they cause us to overvalue or undervalue specific opinions, ideas, or theories. Another reason why alternative viewpoints and considering secondary consequences of our actions and decisions are vital to assess. Misunderstanding and a lack of communication can both lead to further geopolitical tensions. So being aware of any potential biases and knowledge gaps could enable geopolitical leaders to cut each other some slack.

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So if biases and knowledge gaps exist in all walks of life, where do we see them in game theory?

· 1) Dunning-Kruger. – I’ve got countless examples of the Dunning-Kruger effect in my own life. The first time I played poker and I won, then changed the group in which I played for the second time, and I got destroyed. When I started trading and investing, my emotions controlled my actions. I checked the numbers, and when my leveraged trades took a large plunge I sold it all at a large loss. Even though some of those positions were great entries that I would have still been in a positive return now, I let emotions of overconfidence in my own abilities lead to my fear controlling my actions. There’s a great quote that says, “Things will never be as bad as we think, but they’ll never be as good either”. So take a step back, most things resolve themselves without drastic action. And be aware of Dunning-Kruger. Always remember when you find yourself in a pit of despair and underconfidence, you were meant to end up here. And in the long run, you’ll be glad you found yourself in the pit of despair.