Game theory-related careers?
The more I learn about game theory, the more I love it—are there any specific career paths that involve game theory more than others?
Trending Content - Off Topic Forum
Career Resources
Distressed debt investing or RX advisory
Could you elaborate on that please? Please do provide practical examples of game theory being used in RX or DD?
Game theory has little practical applications, and even less applications for which you would get paid. The only use of pure game theory for business purposes are airwaves auctions in the USA.
However, if you like game theory, there's a good chance you'd also like industrial organization, which opens a lot of options related to competition, either on the antitrust regulation level if you have a law background or at the business strategy level.
This made me laugh. Any situation with multiple players all making decisions that affect each other will draw on the principles of Game Theory. It's highly useful in any business-related field, esp. IB.
Bullshit, please do provide practical examples of game theory being used in investment banking.
Ok bud. A basic (sure, silly) example is a group of first-year analysts deciding when to go home at night. If everyone cooperates and heads home at an early time together, there won't be a severe punishment for any individual. However, the incentive for someone to "defect" and stay in the office longer is high, as they'll reap all the benefits (face-time, senior exposure), at the expense of their co-workers who left early.
Addressing the original poster's point more generally: any front-office role in the financial services industry is likely to draw heavily on the principles of game-theoretic decision making.
Also to you: does studying finance in college have any "practical applications"? All models are heavily templatized, and you don't need any finance knowledge to put together PPT presentations. That's why you see all the banks willing to hire art/history majors.
You didn't provide a practical example of game theory being used in IBD, you literally imagined a variant of the prisoner's dilemma involving IBD analysts. Your example does not even relate to the job of an investment banker in itself, but merely to their work environment and its dynamics. See, I could throw monkey shit on your post right now, but I won't, because I know that if I do, I'll receive monkey shit myself. Yet, if my post receives monkey shit, then I will make sure to throw MS on yours too. The optimal situation would be that neither of us throw MS, but in the case of a 1-period game, I would rather throw MS at you rather than running the risk of receiving shit while you stay clean. Does it mean that you need to know game theory to post on WSO?
Your point on art and history majors is correct, but you seem to argue that knowing game theory would actually prove useful when you work in investment banking. That's not the case, because as you said, copying and pasting logos on Powerpoint rarely requires you to find a Nash equilibrium.
Being able to talk about game theory is cool, the same way that being able to talk about art or history is cool, but knowing game theory in particular is rarely useful. The main reason is because in real life, you simply can't evaluate and even less quantify the outcomes of each possible situation. All situations in which game theory is used are highly experimental and, as you proved with your example, intrinsically theoretical.
advising your PE client on how high of a bid to put in for the second round auction comes to mind
OH shut up you guys are a Prospect and an Intern. WTF do you know?
To OP: @latinblue' game theory is very applicable in applied economics research and can be very useful in data science. Any sort of quantitative decision making, game theory is very very useful.
If you want a career where game theory is involved, you'd want to be an academic or an industry researcher.
Corp Dev / Corp Strat
We don't really ever explicitly reference or "use" game theory. However, the principles taught in game theory are largely applicable to acquiring or partnering with a company.
What do they know, what do we know, what do they know ABOUT US (or customers, size, metrics, etc) what do we know about THEM (their operations, costs, margins, etc).
How do we respond to their RFP, what economic models do we show them, in what context do we show them in, what's the story we're trying to craft, how will they respond, is that how we want them to respond, can we take this approach and make both the internal teams and the partner happy?
Everything above gets exponentially more important when we're negotiation with two companies in the same / similar space or industry.
That means it's a huge gamble. Be careful. Go into HF then![]()
https://media1.giphy.com/media/xUOwG5hJ7pO0A2xx3G/giphy.gif" alt="Game theory-related careers?" />
Being one half of a crime duo should also do the trick
Poker is entirely based on game theory. You could be a poker pro Eg: https://math.mit.edu/~apost/courses/18.204_2018/Jingyu_Li_paper.pdf
I second distressed debt investing
Could you elaborate on that please? Please do provide practical examples of game theory being used in DD?
Read distressed debt analysis by Stephen Moyer, it’s one of the earlier chapters where he explains this
Are you using three different accounts? What's with the " Please do provide practical examples"? Just ask if there's any notable examples.
Anything involving auctions and/or bargaining.
Auctions exposure could for example be working at a large art collector active in competitive auctions. Similar dynamics in any (public) tenders. Actual jobs could be economist/econometrician for (semi-)government bodies regulating these auctions.
Bargaining makes me think of independent dispute lawyers/advisors who act as third parties in negotiations which are stuck. Would argue that politics at any level also requires all parties to 'use game theory' in negotiations.
Do agree with others that, even in these fields, game theory is only a small part of any viable career.
i remember when i first watched a beautiful mind too
Aspernatur dolor et quo ducimus animi dolore mollitia. Perspiciatis doloremque eum excepturi aut.
Praesentium consequatur eveniet omnis incidunt quisquam. Quo sit fugiat magni. Et temporibus mollitia repellendus sed. Autem repudiandae amet aliquam. Non qui impedit enim voluptas ratione.
Porro non magnam debitis totam doloribus eum. Voluptas quis ex et rem nisi. Ex perspiciatis quis velit corrupti omnis provident.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Rem inventore et laboriosam in. Est harum id eveniet molestias. Sit numquam voluptatem quis minus voluptas et. Provident molestiae quis odit sit.
Omnis autem soluta temporibus asperiores rerum est. Eligendi in quidem ut necessitatibus eos amet vel accusamus. Sint molestias sed distinctio error vel est.
Voluptate et at et. Voluptas ab voluptatem consequatur ut consectetur similique illum. Eos harum deleniti et dolor voluptatum. Non rerum qui aliquid. Et dignissimos pariatur reiciendis doloremque.