Game theory. Every time I talk to someone
about token economics they say, "oh
yeah it's all game theory." And "everything
is linked to game theory." And "you
want to use game theory and it's going to be solved"
Well yes and no. In this short
tutorial or in this short video, I'm
gonna share what game theory is and how
it can be linked to token economics.
So, what's game theory? Game theory is
really just strategic decision-making.
What's strategic decision-making? If you
have 4 options available, you have to
think about outcomes. If you take option
A what happens? Option B what happens? Option c
what happens?O Option D what happens?
Based on the outcomes of the different
options, you want to choose the best
decision. If you think about it, it's
like playing chess. Every move in chess,
you have to think what would the
opponent will do and if your chess piece will
be eaten up or not. You have to plan
your way. 
So game theory is really this art of
making the right decisions and making
really rational decisions to make sure
that the decisions are correct. What
does it ultimately do? Ultimately, you
want to analyse the behavior of people
as well as the outcomes. We call these
outcomes or payoffs.
Sometimes the outcomes include different
rewards and it could be in monetary
terms. So we call it payoffs. And you know
in economics it's all about
understanding how people behave so we
can make predictions based on that and
we can have different kind of rules to
govern these kind of systems. Which
brings me to the last point, what in the
world has it got to do with token
economics? Well with token ecosystems we
have a lot of rules embedded. You have
different kinds of governance & consensus,
we have different kind of protocols
available and all of these are under
this section caught "mechanism design". 
In mechanism design, what we're doing is to
create the rules in the game. So how is
this linked to game theory?
When you have an option
available, let's say 3 choices.
for the person to choose from.
 I want the person to choose
the first choice, option A. How can I
incentivise people to do that? There
are a few ways to do it.
(1) Firstly you don't have any rules. You
realise, without any rules,
people would choose option B.
(2) What can I do? I can have an
incentive for them to just option A
If you choose option A, maybe you get some rewards.
If you choose option B
you'll get punished. Maybe you can't use
your tokens for the
next three days. If you choose option C, it's
not attractive anyways. People don't
choose that but maybe you just put a
small deterrence, just in case like a small punishment.
We can use this kind of punishments and
incentives to really change the behavior
of people. As a result, we can change
the outcome. It makes the whole
ecosystem a little bit more predictable.
In general, people like predictability.
When we know what's going to happen, we
feel a lot safer. We feel that we can
join the ecosystem we can participate in
in the ecosystem. So from a very very
high level, that's game theory.
If you're interested to get a more
real-life example I'm happy to share an
example with Boeing versus Airbus.
If I can get ten people
to comment the airplane emoji (✈️)  in the
comments below, I share the example
of Boeing versus Airbus and how we are
where we are here today. In the
past, Boeing was the market leader and
now it's a flip and switch. Airbus os
the market leader now. What happened? How did they get there? 
And what's the what's the deal
with all of it? Everything is linked to
game theory and there's nothing got to
do with prisoner's dilemma. Everyone
talks about that. Game theory is a lot more
than just prisoner's dilemma. So if
you're interested, ten people put the
airplane emoji (✈️) below and I'll make a
videos to share it.
Till the, byeeeeeee 👋🏻
