Achieving the best outcome in any situation involves understanding Nash equilibrium and the prisoner's dilemma.

Unfortunately, this won’t include cheat codes for GTA or secret moves for Ghost of Tsushima.

Game theory is a branch of mathematics that analyzes the strategies of interaction between two or more parties and the consequences of their decisions. In this context, a game represents a clash of interests, and the players don’t necessarily have to be human!

In other words, it is a scientific approach to studying human interactions, attempting to explain it as a game with a specific set of combinations for each side. Any decision sets the entire system into motion and affects the outcome of the game itself. Naturally, the ultimate goal is to find a winning strategy.

Every individual thinks through the steps to achieve their goals. However, game theory also takes into account the moves of opponents, their intentions, possible countermeasures, and even how competitors can reach a favorable outcome. It’s a valuable concept!

The founder of game theory is generally considered to be the Hungarian-American mathematician John von Neumann. In 1944, he published a work titled “Theory of Games and Economic Behavior” along with economist Oskar Morgenstern (yes, that’s amusing).

Primarily, Neumann studied what are known as “zero-sum games.” These are situations where the winner takes all that the other players lose, making cooperation among competitors impossible. The total of wins and losses equals zero.

The simplest example of such a situation is poker or any other gambling game, where the winner takes the bets from other players.

However, the name most synonymous with game theory is that of American mathematician and Nobel laureate John Nash.

As a young student, John did not like mathematics at all. Yet, by the age of 21, he wrote a paper for which he would later receive the Nobel Prize in Economics 45 years later.

Nash’s idea was both simple and brilliant. He proved that there are many instances where the total of wins and losses is far from zero. Outcomes can occur where the total is below zero (everyone loses), as well as where the total is above zero (the majority wins).

John Nash challenged even Adam Smith by disproving his assertion that competition is the main fuel of the market. The mathematician demonstrated that the strategy of “each person in the group does what is best for them” ultimately implies only one winner from the entire group. Moreover, there is a possibility that no one ends up winning.

However, if participants are concerned not only with their own interests but also with the group's goals, each of them has a chance to gain their share of the overall success.

Nash also proved that in every competitive game, there exists an equilibrium.

So, here’s the situation. Two criminals are caught at the same time for similar crimes. The investigation believes they acted in collusion, but there is no direct evidence. The police isolate them from each other and offer the same deal. If one testifies against the other while the other remains silent, the first is released for assisting the investigation, while the second receives 10 years in prison. If both remain silent, their actions are treated under a lesser charge, and they serve one year in prison. If both prisoners testify against each other, each receives two years in prison.

Each prisoner has a choice — to remain silent or to testify against the other. Neither knows for sure how their unfortunate companion will act. The most advantageous option is to take the risk and stay silent, hoping for cooperation from the accomplice. But how would any rational person behave? They probably wouldn’t end up in prison... But what if they did?

The most rational option is, of course, to betray the accomplice and start talking. This is the only way to avoid the maximum sentence regardless of the partner's actions. Ultimately, the entire strategy boils down to minimizing one’s own risks, while the most favorable outcome would arise only from considering the common good.

Common sense helps us avoid strange situations. Well, if you do find yourself in one — mathematics will help you emerge from any situation in the best possible light!