Game Theory and Winning at Work

Game theory is such an interesting line of philosophical and mathematical deduction, and my favorite delightfully complicated thing to ponder over Saturday morning coffee while I write these updates. I’m both a novice and apprentice on the subject, and also a super-fan.

If you’re out of the loop on Game Theory and its connection to gamification (i.e. our L&D superpower at Leaders Uplifted)- that’s totally understandable. Not many people are out there studying the ability to reason-out the relative success of social interactions and connections by assessing for preference and pattern while also predicting behaviors based on variables in individual choice and the probability of those patterns emerging when a group of individuals make decisions simultaneously, together.

At least, that’s my quick top-of-mind definition. Game Theory in my own words, so to speak.

Stanford says: Game theory is the study of the ways in which interacting choices of economic agents produce outcomes with respect to the preferences (or utilities) of those agents, where the outcomes in question might have been intended by none of the agents.

If all that sounds too heady and complicated let's take a look from a simple, practical lens, game theory headlines IRL:

First, how you prioritize your work and life comes down to your values and the choices you make according to those values.

Next, life will present you with pathways, obstacles, and choices that move you forward.

Because of that, your success at living a life aligned with your values could be described as a set of unfolding steps and patterns toward a desired goal.

That is, as your life plays out, the choices you make determine your success.

This, my friends, is also the definition of a game.

Games Are Created From Values and Choices

To go a little deeper, let’s look at a real-world example: if you prioritize time with family and it’s one of your values, you’ll continually make choices that help you get closer to your family. Your game is keeping family first. Activities that help you find that connection- like time together, conversations, trips and vacations, celebrations, shared meals- these are moments where you could smile and simply realize you’re winning at life.

By the same token in the context of work- a huge factor in time with your family- you'll benefit from a flexible working system that lets you achieve tasks in your own time outside of a standard 9 to 5, giving you the ability to make it to important milestones like your kid getting an award or traveling for a family members 80th birthday party. You’ll thrive more in work environments that offer flexible ways for you to prioritize time with family on special occasions.

An employer who gets this might offer a flexible or hybrid work schedule in addition to PTO as a cost-effective way to incentivize teammate loyalty. On the one hand, the time for the employee is priceless, while for the employer, retaining top talent holds tremendous value too (much more than the cost of leaving early one afternoon to catch the school play).

Flexible work is just one example of how business leaders can strengthen engagement by knowing what their employees truly value. Other examples include investment in continued learning and professional development, service-focused projects that give back to the community, emerging leader programs and pathways to promotions and raises, even the simple promise of clarity around their roles and tasks with encouragement and support from leadership- these are all culture-building practices that make a big difference for how bought-in, connected, and inspired your team feels at work.

The headline is, supporting your employees shouldn’t be seen as a zero-sum game (a game where one player's win equates to another’s loss). That is, giving them more flexibility, respect, or compensation for their work shouldn’t be seen as something that takes away from the business’s success. I’ve seen the opposite over my 20-year career. Leaders who demonstrate the ways they care about their employees in actions as well as words get the benefit of growth, performance, and commitment from those teammates.

I’m not the only one who understand this. Science has been taking a look too, and this brings me back around to Game Theory and how it can help us understand workplace relationships and the impact of group dynamics on business success.

Learning From The Prisoner’s Dilemma

The most famous philosophical problem in game theory is known as the prisoner's dilemma and it posits a powerful deductive reasoning exercise on this question that goes like this:

Two criminals are arrested and interrogated separately by the police. The police have enough evidence to convict them of a minor offense but not enough to convict them of a more serious crime unless one or both prisoners confess. The prisoners are given the following choices:

1. If both prisoners remain silent (cooperate with each other), they will each receive a light sentence (e.g., 1 year in prison).
2. If one prisoner betrays the other (defects) and the other remains silent, the betrayer goes free, and the silent prisoner receives a heavy sentence (e.g., 10 years in prison).
3. If both prisoners betray each other (both defect), they each receive a moderate sentence (e.g., 5 years in prison).

The Dilemma:

• Cooperation (staying silent) is mutually beneficial, but there’s a temptation to defect because betraying the other prisoner offers the possibility of going free.
   
• Defection (betraying the other) protects each prisoner against the worst-case scenario (being the only one who remains silent while the other defects), but if both defect, they both end up worse off than if they had cooperated.

The Outcome:

In a one-time scenario, the rational choice for each prisoner, considering their self-interest, is to defect because it minimizes their potential maximum loss. However, this leads to both prisoners being worse off than if they had cooperated.

Real-World Applications and Tit-For-Tat

The Prisoner’s Dilemma illustrates the challenges of cooperation in various situations, such as business negotiations, environmental agreements, or even personal relationships. It shows how individual rationality can lead to collective irrationality, where everyone ends up worse off. In repeated interactions, strategies like “tit-for-tat” (where players reciprocate their opponent’s previous move) can encourage cooperation and better outcomes over time.

To fully understand the bigger philosophy of the Prisoner’s Dilemma—especially the impact of a tit-for-tat system—I highly recommend joining the 11 million viewers of the work of Dr. Derek Muller from Veritasium in his video: What Game Theory Reveals About Life, The Universe, and Everything. Watch the video here.

The headline Dr. Muller discovers is: the way we interact with others at work can be analyzed through the lens of game theory. And research on the theory clearly shows that teams who choose to engage in supportive behavior, even giving the benefit of the doubt on first misunderstanding, vastly outperform those who’s tit-for-tat strategy is antagonistic and every-man-for-himself.

More simply, teams who work together, go farther.

So how do you make this happen for your team?

Okay, Let’s Play!

Now that you have a better understanding of how game theory can apply to your work life, it’s time to put these concepts into practice.

Ready: Reflect on Your Current Workplace Dynamics

• Think about the interactions you have with your colleagues. Are there situations where you’re competing when you could be cooperating? Are you stuck in a game where defection seems like a better option that collaboration?

Set: Identify Opportunities for Cooperation

• Consider where you can shift from a competitive mindset to a cooperative one. How can you align your goals with those of your colleagues to achieve better outcomes together?

Go: Take Action with These Steps:

• Engage in Open Communication: Just as the prisoners in the dilemma could benefit from a conversation, open communication can prevent misunderstandings and foster cooperation.
• Practice Reciprocity: Implement a “tit-for-tat” strategy in your workplace interactions. If someone helps you out, return the favor. This can build trust and encourage ongoing collaboration.
• Evaluate Your Strategies: Regularly assess whether your approach to workplace dynamics is leading to the best possible outcomes for all parties involved.

Your Call to Action: Know Which Game You’re In

Understanding game theory is not just an intellectual exercise—it’s a powerful tool that can transform the way you navigate your professional relationships. I’m perpetually fascinated by this line of thinking because with just a little observation and awareness, you can recognize the game layer at play all around you- but especially in office dynamics.

The key is to recognize which “game” you’re playing in any given situation. Are you in a one-time negotiation where defection might be tempting? Or are you in an ongoing relationship where cooperation will yield better long-term results?

By being aware of these dynamics, you can make more informed decisions, foster stronger collaborations, and ultimately, win at work—not just for yourself but for your entire team.

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Hey there! I’m Blair Bloomston, the creative mind behind the Play Uplifted blog, fueled by my 20+ years of experience as a game-based learning designer. The ideas and content? All mine. But I have to give a shoutout to my amazing assistant, ChatGPT, who swoops in to fix my typos and smooth out the grammar. Together, we’re here to elevate your leadership game. Cheers for collaborAItion at work!