Decision-Making

I had just learned about microservices. They were amazing. Scalable. Independent. Deployable separately. The future of architecture. So naturally, I rewrote my side project as microservices. The project: A simple todo app. Maybe 100 users. What I built: 7 separate services Docker containers for each Kubernetes for orchestration API gateway Service mesh Distributed logging Service discovery Time to build: 3 weeks Time to build as a monolith: 2 days My manager saw it and laughed. ...

It’s 9 AM. You walk into a conference room at Amazon for a major product decision. No one is talking. Everyone is reading. For 20 minutes, the room is completely silent. Executives, directors, engineers-all reading the same six-page document. No PowerPoint deck. No bullet points. No presenter standing at the front of the room. Just reading. Then, after everyone finishes, the discussion begins. Welcome to Amazon’s most powerful cultural practice: the 6-pager. ...

In medieval England, villages had common grazing land-the “commons”-where all villagers could graze their sheep. Each shepherd faced a decision: How many sheep should I graze? The logic was simple: Adding one more sheep: I get 100% of the profit Cost of overgrazing: Shared among all shepherds So every rational shepherd added more sheep. And more. And more. Until the commons was destroyed. Overgrazed. Barren. Worthless to everyone. This wasn’t malice. Each shepherd was acting rationally in their own self-interest. ...

In 1951, psychologist Solomon Asch invited college students to participate in a “vision test.” The task was absurdly simple: look at a line, then choose which of three comparison lines matched its length. The answer was obvious. A child could do it. There was no trick, no optical illusion. Asch showed this card to the group: Reference Line: | Comparison Lines: A: | B: ||||| C: || The answer is clearly A. Anyone with working eyes can see it. ...

In April 1961, just three months into his presidency, John F. Kennedy approved one of the most catastrophic military operations in U.S. history. 1,400 Cuban exiles, trained and equipped by the CIA, would invade Cuba at the Bay of Pigs. They would spark a popular uprising, overthrow Fidel Castro, and install a democratic government. That was the plan. The reality? The invasion failed within 72 hours. Most of the brigade was killed or captured. No uprising occurred. The U.S. was humiliated internationally. Castro’s regime was strengthened, not weakened. ...

Imagine a game where one strategy is best no matter what your opponent does. You don’t need to predict their behavior, guess their intentions, or outthink them. You just pick the dominant strategy and you’re done. This is the simplest situation in game theory-and when you have a dominant strategy, your decision becomes trivial. Let’s understand this powerful concept. What is a Dominant Strategy? A dominant strategy is a strategy that gives you a better outcome than any other strategy, regardless of what your opponents do. ...

Imagine you and a partner are arrested for a crime. The police separate you into different rooms and offer each of you the same deal. You can’t communicate. You don’t know what your partner will do. And the choice you make will determine whether you go free or spend years in prison. Welcome to the most famous problem in game theory: the Prisoner’s Dilemma. It reveals a disturbing truth about rational decision-making that explains everything from climate change to price wars to why your office kitchen is always dirty. ...

Have you ever wondered why gas stations on the same corner charge similar prices? Or why countries engage in arms races even though both would be better off spending less on weapons? Or why you and your friends can’t decide where to eat, even though everyone wants to go somewhere? These situations all involve strategic decision-making-and that’s exactly what game theory studies. What is Game Theory? Game theory is the mathematical study of strategic interactions. It’s a framework for understanding situations where your best choice depends on what others choose, and their best choice depends on what you choose. ...

When most people hear the word “game,” they think of fun activities like chess, poker, or video games. But in mathematics, a “game” has a much broader and more precise meaning. Game theory studies strategic situations where the outcome depends not just on your choices, but on the choices of others too. What Makes Something a “Game”? In game theory, a game is any situation where: Multiple decision-makers (called “players”) interact Each player has choices (called “strategies”) they can make Each combination of choices leads to an outcome with specific rewards or costs (called “payoffs”) Players care about these outcomes and try to make rational decisions The beauty of this definition is that it applies to far more than board games. Business competition, political negotiations, evolutionary biology, and even social dilemmas are all “games” in the mathematical sense. ...

If you want to master game theory, you need to master payoff matrices. They’re the single most important tool for analyzing two-player games, and once you understand them, you’ll see strategic situations everywhere. A payoff matrix is simply a table that shows every possible outcome of a game and what each player gets in each scenario. But this simple visualization unlocks powerful insights about human behavior, business strategy, and why rational people sometimes make seemingly irrational choices. ...