but you didn't raise your pay from 12 to 300 an hour, you just demanded 12 out of 300 you could, and 2 years later you understood the error and demanded the right amount, all the rest is "common sense theory"
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you got a job straight out of high school that was supposed to pay $250 an hour?..........you clearly were not smart enough to disserve that job if you asked for $12, how the hell do you get a job like that out of high school with zero experience?
Thank you so much for this video , this actually helped me finish my paper on game theory behaviors witch represents a big chunk of my final grade for game theory , thank you once again! I've subbed , that's the least I can do , and I want to see more videos like this , you explain very very well!
This is Mr. Z. You little bastard, who told you about game theory? I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
This is Mr. Z. You little bastard, who told you about game theory. I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
This is Mr. Z. You little bastard, who told you about game theory. I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
you did not appear to assign probabilities to the payouts (think Bayesian games). i think supply and demand would better explain this...your marginal productivity as a worker was not reflected in your pay. your pay now more closely reflects your productivity, given the going rate (or the market rate) for programmers....sorry for over analyzing this, i'm into economics. lol
hey i like your videos i started looking for some game theory explanations for may exam and i ended up learning how to apply it nowadays...... like your videos!
Very motivational! People could apply this to real world situations and negotiate better deals and compensation. Although you have to consider the circumstances on an individual basis. In other words, where you were able to achieve a $300 raise may in turn only be a $20 for some. But, I see the strategy you used and it makes a whole lot of sense.
I used the same strategy in 2006 before I knew anything about GT. So I just had street smarts and balls. I have no college. Started at for a company at $10.92/hr in 2002 left (quit) 2005. Got called back Dec 2005 after I found out the only tech that was left quit. I knew they offered him $17/hr to stay. They offered me 15 I said $18. They bit. Today after replaying this same strategy that ANUZIS shows I now am making $26.46/hr- 160 hrs per month not 10.
Hey thanks for your video. Can you please tell me a good text book I can learn game theory from. I have a thorough knowledge of single and multivariate calculus.
i thought game theory is that you make the bet decision Ratherless of what the other guy does. That is, in the prisoner's dilamea, you always choose the dominant strategy or the best strategy for you without caring what your opponent would do.
this only works in an employee based market. so not now - and not when you know you are replaceable . in this case he was the only it consultant qualified in the .. state
It's not surprising to get your result if you'r the ONLY one in your field in the state. It's not the game theory helping you here, but the market principle of supply and demand. Game theory helped you to be more confident, which made the conversation much more polite, but I don't think it is a good example of the use of game theory. Nevertheless, Congratulations!! Now try to up your number of hours per month.... next step :-)
gusselinius: you retard. learn math he didnt work one hour per month, he worked 10 hence the factor of ten in which you mistakenly corrected him about
its not 250-12 since it is $12 per hour instead of 250... it is 250-238 250x10 is 2500 per month as opposed to 120 per month working 10 hours the difference in these 2 numbers is 2380 there for he lost $2380 per month so you are wrong
ok, the theory is ok, but really standart. If you boss has nothing to gain from firing u but still has nothing to lose, he'll do it anyway.
If he does have something to lose you will need to know to the precise detail how mutch it is going to cost him. In your case, a great deal. But that's just in your case.
Beware that people who read this just wan't more money because they think they deserve it. If you're aren't getting payed enough, it has a reasson. First make yourself an asset to the firm
@Murphydog85 You comment serves as a good example of how to behave if you want to fail at life. Pretending you know other peoples motives for what they did and calling them idiots is not the behavior that wins friends and influences people. Anuzis, would you hire this guy if later asked you for a job? I wouldn't. I don't want anyone this presumptuous and caustic anywhere near my company.
lol. don't you know you are suppose to do mkt data research on the pay of your job before you go for an interview? And always let the company offer you the package first before voicing out the pay you want.
obviously this is not just an introduction to game theory. it is also a story. Anuzis was just bright enough to fuse his story with game theory. yeah apparently this does not apply to every situation you idiots. please post more about game theory. Very interesting.
There is a huge problem with this situation. You were extremely needed by your boss, he couldnt find anyone else. This does not apply to someone who's job can be done by a thousand other people.
I understand and appreciate your application of game theory to this particular problem. However, I think this video oversteps the bounds of necessity and ignores Occam's razor (that you got the raise out of simple S and D). I also think that a further look at S and D will reveal that game theory does not provide an equilibrium price. The psychology of your confidence (possibly a factor) is easily explained with S and D as well. Quick look at game theory, yes. Why you got the raise, no.
You are correct. Game theory is useful for a lot of things, but not for what's going on here. This should be more about supply, demand, and economic "rent."
Ordinary supply and demand theory relies on perfectly rational assumptions and perfect information. This fellow didn't have perfect information or the perfectly "rational" assumption going into the job in the first place. The boss didn't have perfect information about the market and probably (irrationally) was more willing to compromise since he respected the move that this fellow made.
S & D is a poor model for this due to information asymmetry.
good video, but in reality, you didn't negotiate from 12 to 300, you only negotiated from about 200 to 300 (as even he knew you were worth more than 200).
Also, understanding supply and demand alone, you'd know that his options are limited and he'd rather pay you whatever you ask than to hunt down another consultant.
I don't know if S vs D is part of game theory or not, but it seems to be enough to have made the game strategy
Study Game Theory. Good video for begginers, but for all practical purposes you would have been better off coming to the table with offers (or at least possible numbers) from other employers, this makes him not capable of "soft ball" as you state it. You initial conditions were much better than you thought, this is assuming his knowledge of your worth as he expresses in his confusion of 12$/. The values would shift, the dynamic shift and you get a better equillibrium for you
The game is great and smart, but all this on the side, how can you run a business like this: when you know that it is a unique job position with scarcity of people holding the required skills, and that one way or other, the guy (you) will find out about it? Very well executed. although the nature of your job made that possible, the game is great.
great video you should make more. im thinking about taking a game theory class in college next year now. I also saw the move A Beautiful Mind which has some similar situations.
I asked for a raise. I kept doing the same asking and getting ignored. I know I need to leave. My boss is now bullying me. I see he is a chevanist pig. He is upset because he sees I am smarter than he is. Needless to say In this current economy the motto is Shut up and do your job, we do not pay you to think. You had an edge most of us do not in this economy where there are thousands capable of doing my job.
Sorry to hear of your tough times, mate. I'm afraid I have no advice except trying to find other work with a more kind boss. If you're working in an industry where thousands are capable of doing your job, there are probably at least hundreds of potential bosses to choose from... some of whom must be professional.
Hi, I founf your game really interesting, i´m studying economics and I have a class named theory of games,,,, but I have a question about your model, How can I make my boss play medium and not hard?? so I have many ideas,,, Have u tried modeling this situation like Cournot's monopoly game? plz contact me if u r interested see u
it's wonderful to try to modelize everyday life with games and economic arguments. I'm a member of the club too. I used games with girls, and it worked ouy well :D
NICELY explained, my 1st thoughts were " I didn't know this was called game theory at all, i guess i have been using something similar mentally for some time now." Good job gettin that raise, so when was this?
I actually taking game theory right now. I'm just curious, when you drew your matrix it seems to show a simultaneous game. If that's then you wouldn't be able to determine that he's going to play medium. In fact, playing hard gives him a better outcome if you play soft and medium. In other words if I'm Z then I'd play hard if I think you're a wuss and play soft. If he didn't have faith in you beforehand why would he expect you to play hard?
Good observation, because the game is in fact sequential as you point out. Although it can be drawn like a simultaneous game for faster teaching purposes, in practice it's possible to lay out your terms before the other person can respond. I left the diagram simul since it's easier to teach the underlaying thought process in a matrix than a sequential tree.
This video shows another way of explaining the idea behind the negotiating strategy called "Bracketing". Even if Mr. Z played hard ball and anuzis played soft ball, successful bracketing would have produced the same result. The only thing different here is that anuzis knew Mr. Z's true negotiation range thus allowing him to call the shot without the bracketing process. The fact that Mr. Z didn't flinch on the first offer says anuzis could have gotten more.
Great explanation on this theory. I think the best part about the game theory is knowing the result before the negotiation. This gives me motivation to make sure to get paid what I am worth and take the emotion out of the equation!
Great explanation. Never knew you could expand the possiblities to 3x3 matrix. Could their be more possibilities (eg hard soft medium and another one?). Also I saw that you did not fill all the squares in, is it required or is it just part of the uncertainties derived from the lack of knowledge of the boss' behaviour under that situation?
Owle90 - There definitely could be more possibilities than the ones I filled out. You could consider a hard/med route, or med/soft route and try to anticipate what each of those would mean. In the case here I knew the simple answer would work fine so I didn't break things out further.
could the theory not be extended even further to re open the "soft ball" collum for your boss? If he has no alternative surely you could, if you wanted to negotiate further?
If he had no alternative then perhaps, but him playing a medium-ball game seems like it'd get him a better result than him going soft-ball. His soft ball would probably end with him getting a 1 and me getting a 3, whatever that is. I don't have a way to force him to choose that over a 2,2 so it's not something I'd expect. It may be like me asking for a raise and him giving more than I asked for.
Scores are partially based on gut feeling, but more importantly you want them to reflect the value one outcome when compared to another. For example, pay raises of $20, $30, or $500 could be numbered 1, 2, and 3. However, it'd make more sense to rate them something like 1, 2, 10.
Anuzis, if you could recommend me two game theory books, which would they be? I'm smart, but the extent of my knowledge on game theory is limited to the Wikipedia article and your videos. Thanks!
noonej - The only Game Theory book I've read was the text by Avinash Dixit & Susan Skeath. That said, I thought it was a great engaging read and it'd be possible to learn from without a formal teacher/class.
This would really only work based on situation, as you were the only one in state, and $300 was close to what you were originally suppose to be getting paid.
Situation is important for this to work, but it doesn't need to be $300/hr extreme. Any instance where you're underpaid and your employer will have a difficult time replacing you gives you bargaining power to begin negotiating.
hey, I'm up at 5:30 am looking for something on games theory (i was lucky to find the clip i was looking for in Beautiful Mind, which is where i originally heard of it and got excited), but the Wikipedia was no help. your little graph did just the trick!! I would love to learn more.
verry good, the information from the diagram is obviouse but its amazing to have it in front of you just as with other things, im a programmer and im in the same situation as you were.
however, arent u assuming that Mr Z needs you so badly as he saves so much cost by paying you less?
if he were to pay you $300, why wouldnt he fire you and get another at $300 too as he knows tht you can be a possible tough player to ask for a pay raise in future?
Great video. Liked the game theory applications. Were/are you at the U of M, Ann Arbror? It is my understanding that by seeing what possibly can happen using game theory, you felt more confidence. So it was confidence that did the trick, right? Thanks for posting.
Thanks for the feedback. Yes, I was at UofM Ann Arbor. The increase in confidence likely helped some, but knowing how my employer would react based on his payoffs was also very helpful.
I rarely comment on videos because I loath Youtube comments in general, But this video peaked my interests a great deal. I really enjoyed how you made a scientific theory applicable to the social/business situation that you were in at the time, truly a hand well played.
I have a video myself applying game theory to solve another problem, known as King Solomon's dilemma. So I know game theory. What impresses me is the extreme popularity of this video. Nice way to present the theory to the general public.
nice video but as you say ..you were the only one in town, what if there were more people to hire? how long will it take your ex-boss to train another guy? and how much will he save?I believe you can play this only when you think you dont care to be fired or not and most of the times you know you cant play hard with your boss,youll never win .regards
crisskiss - good questions to be asking. it's all about the underlaying principles. there's no silver bullet to get paid way more than you're worth, but if you develop a skill in high demand there will always be ways to leverage it.
Then change the weights...anuzis put -5 for his boss's weight just for that reason. Otherwise he wouldn't have chosen that box; he might have gone for the medium type which would have gotten him a 2.
Interesting, but for anyone thinking of trying this approach to negotiating a pay raise - take note of the unique situation that "anuzis" was in. He knew the market value of his labor and the fact that he was being grossly underpaid presented the high opportunity cost for his boss, so unless you are "the only ___ in the state", paid 5% of the market wage, you won't have as much bargaining power. Should have split the $75K he saved by underpaying you too :) ($2400/mo, r=4%, 28 months... ~$75K).
great day to yu to sir. BRILLIANT. when i become the next Donald Trump...yu are so in my work force. you'll manage my business. I need more, and maybe we should work together.seriously
If I did this, my boss would still go "Nope." nothing of value was gained other than bad rep.
mcSnoski 3 weeks ago
good idea.
me.. i just go to my boss and yell:
"Gimme maor mon$y bling bling yo" it work a few times you should try it.
rorosamy 3 weeks ago
It´s nice, but I´m not a nerd, so my boss can easily find somone else, so in my case (and I think in most cases) it definetely wouldn´t work.
lincipici 1 month ago in playlist Negotiation
Nice job. simple implementation of game theory, but totally necessary in everyday situations. big rep for promoting this very useful tool
smohan123 2 months ago
but you didn't raise your pay from 12 to 300 an hour, you just demanded 12 out of 300 you could, and 2 years later you understood the error and demanded the right amount, all the rest is "common sense theory"
ThjeshtLife 3 months ago
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popovar78 4 months ago
you got a job straight out of high school that was supposed to pay $250 an hour?..........you clearly were not smart enough to disserve that job if you asked for $12, how the hell do you get a job like that out of high school with zero experience?
acc771 7 months ago
it's great, however you're an IT guy and he didn't have the choice,however, in other
places where the competition is tough...it might get more difficult than that. But cool stuff about game theories.
CheesyFrenchy 7 months ago
This is common sense...although I don't believe the $300.00 an hour, I'm sure he could find someone else... lots of jobless nerds out there
TheCosmosAndromeda 7 months ago
This is common sense
TheCosmosAndromeda 7 months ago
Oh yeah, 2500% pay rise. Sure that happened in real life :D I believe you (Y)
toolworks 7 months ago
Very helpful
Xavygravy 7 months ago
this logic is the problem!
TheSilverback1976 7 months ago
That was awesome. I guess your boss figured you researched how much other people in your field were making as well.
TheDivaInOrange 7 months ago
I think this only works if a person is truly unreplacable. To bad for unskilled workers! Nice vid, congrats on past achievements!
themostample 8 months ago
Thank you so much for this video , this actually helped me finish my paper on game theory behaviors witch represents a big chunk of my final grade for game theory , thank you once again! I've subbed , that's the least I can do , and I want to see more videos like this , you explain very very well!
flourishesANDtricks 8 months ago
Ron Paul 2012 for President
RunLiberty 8 months ago
Totally understand... to bad I did not know this years ago....
XXIBECCAIXX 8 months ago
Brilliant Illustration...
looking forward for future parts on Negotiation aka Game theory..!!
Josh071 11 months ago
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Wish you videotaped the meeting where you asked for the 2400% increase. Like to have seen the dude's face.
BlueberryJava 1 year ago
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BlueberryJava 1 year ago
good work. but your game theory only applies to circumstances where demand is high and supply is VERY low.
hsk8787 1 year ago
Nice. How would I cite you if I used your situation in a presentation on Game Theory?
SuperStephaniedavis 1 year ago
@SuperStephaniedavis Link to video seems fine. Thanks.
anuzis 1 year ago
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SuperStephaniedavis 1 year ago
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This is Mr. Z. You little bastard, who told you about game theory? I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
And where can I take a course in Unix BSD?
puddingebola 1 year ago
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This is Mr. Z. You little bastard, who told you about game theory. I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
And where can I take a course in Unix BSD?
puddingebola 1 year ago
This is Mr. Z. You little bastard, who told you about game theory. I'm gonna have them killed. I'm gonna take them out to my shed in the woods and have them dismembered.
And where can I take a course in Unix BSD.
puddingebola 1 year ago 7
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hi!!! love your videos!!!! i'm kind of obssesed with the topic and now that i know it can be applied into daily life i´m even more obssesed.
Are U an economist????
thanks for the video! XD
linkinshirley 1 year ago
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hi!!! love your videos!!!! i'm kind of obssesed with the topic and now that i know it can be applied into daily life i´m even more obssesed.
thanks for the video! XD
linkinshirley 1 year ago
This has been flagged as spam show
hi!!! love your videos!!!! i'm kind of obssesed with the topic and now that i know it can be applied into daily life i´m even more obssesed.
thanks for the video! XD
linkinshirley 1 year ago
hi!!! love your videos!!!! i'm kind of obssesed with the topic and now that i know it can be applied into daily life i´m even more obssesed.
thanks for the video! XD
linkinshirley 1 year ago
bingo. have tried lately, but didnt work....
ajoychacko9 1 year ago
get to the point!
philipjterry 1 year ago
you did not appear to assign probabilities to the payouts (think Bayesian games). i think supply and demand would better explain this...your marginal productivity as a worker was not reflected in your pay. your pay now more closely reflects your productivity, given the going rate (or the market rate) for programmers....sorry for over analyzing this, i'm into economics. lol
liv2ride2liv 1 year ago
That was good, thanks! I am new to Game theory, and that helped me clear the concept...
HyperboricPhil 1 year ago
hey i like your videos i started looking for some game theory explanations for may exam and i ended up learning how to apply it nowadays...... like your videos!
marie3885 1 year ago
Good for you, Go Wolverines!
namebrandaddikt 1 year ago
Excellent!!!!
mohamedqasem 1 year ago
Very motivational! People could apply this to real world situations and negotiate better deals and compensation. Although you have to consider the circumstances on an individual basis. In other words, where you were able to achieve a $300 raise may in turn only be a $20 for some. But, I see the strategy you used and it makes a whole lot of sense.
ThePensiveChimp 1 year ago
I used the same strategy in 2006 before I knew anything about GT. So I just had street smarts and balls. I have no college. Started at for a company at $10.92/hr in 2002 left (quit) 2005. Got called back Dec 2005 after I found out the only tech that was left quit. I knew they offered him $17/hr to stay. They offered me 15 I said $18. They bit. Today after replaying this same strategy that ANUZIS shows I now am making $26.46/hr- 160 hrs per month not 10.
suprasiix 1 year ago
Hey thanks for your video. Can you please tell me a good text book I can learn game theory from. I have a thorough knowledge of single and multivariate calculus.
yalg22 1 year ago
i thought game theory is that you make the bet decision Ratherless of what the other guy does. That is, in the prisoner's dilamea, you always choose the dominant strategy or the best strategy for you without caring what your opponent would do.
xxzunitxx 1 year ago
I only wish you had filled out the chart completely based on analysis of options.
basedrop 1 year ago
thanx , this puts a new dimension to negotiations
mememe84 1 year ago
hmmm, so u lost $238(250 - 12) per hour for 6 month...
and then u gain $50 per hour after the raise...
u needed to work for 30 more months just to break even.
Seems to me, if u got 250 in the beginning you would have been much better off
sonnyhe2002 1 year ago
Darn, wish I knew this while I was working. Wonderful tool for the future though :)..Thank you
geethike 1 year ago
this only works in an employee based market. so not now - and not when you know you are replaceable . in this case he was the only it consultant qualified in the .. state
level2seven 1 year ago
Hey man... good stuff.. q practical..
keep it coming :)
shaurya87 1 year ago
So nerd to make this chart.... You dont need to make a CHART to realise you have to do this...
LiveLucid 1 year ago
thank you-this will help me,tell me how much longer did that job last -at that pay?
cellophane331 1 year ago
This only works if Mr. Z thinks logically and doesn't let his emotions get involved.
aikaha 1 year ago
YES, Mr. Z could become defensive and want to "win" every "battle" even if it means taking a loss.
cheeseit126 1 year ago
thank you for this, i feel more confident about my negotiation tomorrow now!
ucsarah 2 years ago
Sweet, you really make me understand this :D glad for your money raise btw:)
FBSmartArab 2 years ago
duuuude, post more videos on game theory, dammit u have just 2 vids on game theory no chapter 2 or 3 or...
ericcartmansh 2 years ago
Run you're audio through a basic EQ and take out some high end. It'll make this video so much better to listen to. Because it is really informative.
samueldavidadams 2 years ago
Very interesting. Good application of Game Theory to life ! Where is your blog ?
iluchinna 2 years ago
great video!
Stevenduizel 2 years ago
In year 2009 and 2010, you would probably end up getting -1,0 (or -1,-1)
engr123 2 years ago
Thanks for this. I am going to try this strategy tomorrow.
TheFugazi39 2 years ago
It's not surprising to get your result if you'r the ONLY one in your field in the state. It's not the game theory helping you here, but the market principle of supply and demand. Game theory helped you to be more confident, which made the conversation much more polite, but I don't think it is a good example of the use of game theory. Nevertheless, Congratulations!! Now try to up your number of hours per month.... next step :-)
DiederikStaay 2 years ago 4
thanks, i learned game theory and the 2 prisoners' dilemma at Uni, but i forgot how it works.. thanks for jogging my memory :)
and .... i think u r very cute :D
jeremynobigdeal 2 years ago
LOL
"Whatever people DEMAND"
Supply what the market demands, son!
shockedandamazed 2 years ago
sweet man. I'm going use this too. we just learned this in Micro econ.
liloaznboi 2 years ago
Well, I was thinking about the two years that you got paid 12$ per hour instead of 250$.
It means that you lost 2380$ per month, working 10 hours per month, and total of 57120$ during this two years period!
mmm....
this guy really exploited you...
saarpeer 2 years ago
@saarpeer what? 250-12=238, not 2380... and of course mr Z has to make a profit so it wasn't that bad :P
gusselinius 2 years ago
gusselinius: you retard. learn math he didnt work one hour per month, he worked 10 hence the factor of ten in which you mistakenly corrected him about
slovakmath 2 years ago
its not 250-12 since it is $12 per hour instead of 250... it is 250-238 250x10 is 2500 per month as opposed to 120 per month working 10 hours the difference in these 2 numbers is 2380 there for he lost $2380 per month so you are wrong
oneshotkill27 2 years ago
hahaha... That's some really messed up calculation Guss... Hope Slovakmath answered your doubt .. lol
shaurya87 1 year ago
Very good.
cort87 2 years ago
ok, the theory is ok, but really standart. If you boss has nothing to gain from firing u but still has nothing to lose, he'll do it anyway.
If he does have something to lose you will need to know to the precise detail how mutch it is going to cost him. In your case, a great deal. But that's just in your case.
Beware that people who read this just wan't more money because they think they deserve it. If you're aren't getting payed enough, it has a reasson. First make yourself an asset to the firm
mindlessconspiracy 2 years ago
jesus christ get a better sounding vid cam this is painful
DarthJohn111 2 years ago 2
What a great video. I tried this at my current job and and went from $20 and hour to $30 an hour. You're a ninja, Michael.
drdunk44 2 years ago
game theory is HOTT.
(no homo)
dvaughn11 2 years ago
good for you man; since you have a very specialized skill and he is left with no alternative - your game works. but nice video.
parinonly 2 years ago
hey that was great awaiting for your lesson 3
tcsrinivasan 2 years ago
Comment removed
Murphydog85 2 years ago
@Murphydog85 You comment serves as a good example of how to behave if you want to fail at life. Pretending you know other peoples motives for what they did and calling them idiots is not the behavior that wins friends and influences people. Anuzis, would you hire this guy if later asked you for a job? I wouldn't. I don't want anyone this presumptuous and caustic anywhere near my company.
DingoHammer 1 year ago
lol. don't you know you are suppose to do mkt data research on the pay of your job before you go for an interview? And always let the company offer you the package first before voicing out the pay you want.
littlenovajelly 2 years ago
obviously this is not just an introduction to game theory. it is also a story. Anuzis was just bright enough to fuse his story with game theory. yeah apparently this does not apply to every situation you idiots. please post more about game theory. Very interesting.
19critter91 2 years ago
There is a huge problem with this situation. You were extremely needed by your boss, he couldnt find anyone else. This does not apply to someone who's job can be done by a thousand other people.
RsZer0 2 years ago
hey hector! actually, I am educated. You dont like my question cuz it confused you? think about it and answer it if you are so educated.
hectik5010 2 years ago
is your name hector torres??????
hectik5010 2 years ago
awesome
venkkysgmail 2 years ago
Very nice video. Im glad u posted this.
rubencitorobles 2 years ago
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:) pretty good stuff.. : )
slenzergotham 2 years ago
Nice work, Dude
trinisexgod 2 years ago
MANNNN u kick ass!!!
Thanx a lot...
Game Theory rulesss :D
QEDT 2 years ago
I understand and appreciate your application of game theory to this particular problem. However, I think this video oversteps the bounds of necessity and ignores Occam's razor (that you got the raise out of simple S and D). I also think that a further look at S and D will reveal that game theory does not provide an equilibrium price. The psychology of your confidence (possibly a factor) is easily explained with S and D as well. Quick look at game theory, yes. Why you got the raise, no.
amarurecor 2 years ago 9
You are correct. Game theory is useful for a lot of things, but not for what's going on here. This should be more about supply, demand, and economic "rent."
JimBobJenkins 2 years ago
@amarurecor
Ordinary supply and demand theory relies on perfectly rational assumptions and perfect information. This fellow didn't have perfect information or the perfectly "rational" assumption going into the job in the first place. The boss didn't have perfect information about the market and probably (irrationally) was more willing to compromise since he respected the move that this fellow made.
S & D is a poor model for this due to information asymmetry.
david0aloha 1 year ago
Awesome, please can we have some more!
LockwoodKatie 2 years ago
Great video dude i like it
clive6point25 2 years ago
Awesome stuff, man!
KruspeFish 2 years ago
It is great ! thanks.
boonyaik 2 years ago
wow dude you are amazing. You are totally saving my ass in econ. Thanks!
CloudChasing 2 years ago
good example..
omarolocabe 2 years ago
good video, but in reality, you didn't negotiate from 12 to 300, you only negotiated from about 200 to 300 (as even he knew you were worth more than 200).
Also, understanding supply and demand alone, you'd know that his options are limited and he'd rather pay you whatever you ask than to hunt down another consultant.
I don't know if S vs D is part of game theory or not, but it seems to be enough to have made the game strategy
funwjoshnjenn 2 years ago
Cool Video Keep Em Commin!
thomaslecky203 2 years ago
Game Theory Rocks!
coolkate12 2 years ago
Study Game Theory. Good video for begginers, but for all practical purposes you would have been better off coming to the table with offers (or at least possible numbers) from other employers, this makes him not capable of "soft ball" as you state it. You initial conditions were much better than you thought, this is assuming his knowledge of your worth as he expresses in his confusion of 12$/. The values would shift, the dynamic shift and you get a better equillibrium for you
bineuralboy 2 years ago
Luv ya.
andreatrompczynski 2 years ago
concept used in loan modification
NoticeOfDefault 2 years ago
The game is great and smart, but all this on the side, how can you run a business like this: when you know that it is a unique job position with scarcity of people holding the required skills, and that one way or other, the guy (you) will find out about it? Very well executed. although the nature of your job made that possible, the game is great.
nimastriker 2 years ago
great video you should make more. im thinking about taking a game theory class in college next year now. I also saw the move A Beautiful Mind which has some similar situations.
thedeven1 2 years ago
now now...i have a crush on u:D:D:D:D
hyderabadi11 2 years ago
u r cute:D
verrrrrry cute :D
hyderabadi11 2 years ago
I asked for a raise. I kept doing the same asking and getting ignored. I know I need to leave. My boss is now bullying me. I see he is a chevanist pig. He is upset because he sees I am smarter than he is. Needless to say In this current economy the motto is Shut up and do your job, we do not pay you to think. You had an edge most of us do not in this economy where there are thousands capable of doing my job.
Act like you know.
speciesamused 2 years ago 2
Sorry to hear of your tough times, mate. I'm afraid I have no advice except trying to find other work with a more kind boss. If you're working in an industry where thousands are capable of doing your job, there are probably at least hundreds of potential bosses to choose from... some of whom must be professional.
anuzis 2 years ago
Hi, I founf your game really interesting, i´m studying economics and I have a class named theory of games,,,, but I have a question about your model, How can I make my boss play medium and not hard?? so I have many ideas,,, Have u tried modeling this situation like Cournot's monopoly game? plz contact me if u r interested see u
mephisallo 2 years ago
this is more about game theory, and deciding your best option. sometimes you are better off not doing anything!
13zombielover 1 year ago
@13zombielover I did get a raise from the D.M..
They closed the store. Unemployed now. So is the manager
as the D.M. saw he was a bad manager. Karma.
speciesamused 1 year ago
well done mate
it's wonderful to try to modelize everyday life with games and economic arguments. I'm a member of the club too. I used games with girls, and it worked ouy well :D
Cheers
coperTony 2 years ago
NICELY explained, my 1st thoughts were " I didn't know this was called game theory at all, i guess i have been using something similar mentally for some time now." Good job gettin that raise, so when was this?
NarutoV2DL 2 years ago
4-5 years ago. working at a search engine now. :)
anuzis 2 years ago
Sounds like an unbelievable situation, though that was a pretty good evaluation of a typical game theory scenario.
Giordano87 3 years ago 2
I actually taking game theory right now. I'm just curious, when you drew your matrix it seems to show a simultaneous game. If that's then you wouldn't be able to determine that he's going to play medium. In fact, playing hard gives him a better outcome if you play soft and medium. In other words if I'm Z then I'd play hard if I think you're a wuss and play soft. If he didn't have faith in you beforehand why would he expect you to play hard?
CaesarXXIV 3 years ago
Good observation, because the game is in fact sequential as you point out. Although it can be drawn like a simultaneous game for faster teaching purposes, in practice it's possible to lay out your terms before the other person can respond. I left the diagram simul since it's easier to teach the underlaying thought process in a matrix than a sequential tree.
anuzis 3 years ago
Hi CaesarXXIV,
This video shows another way of explaining the idea behind the negotiating strategy called "Bracketing". Even if Mr. Z played hard ball and anuzis played soft ball, successful bracketing would have produced the same result. The only thing different here is that anuzis knew Mr. Z's true negotiation range thus allowing him to call the shot without the bracketing process. The fact that Mr. Z didn't flinch on the first offer says anuzis could have gotten more.
- PeopleDigitaL
PeopleDigitaL 3 years ago
very nice!
I study game theroy and it has really helpful and simple illustration :)
luluz7 3 years ago
Great explanation on this theory. I think the best part about the game theory is knowing the result before the negotiation. This gives me motivation to make sure to get paid what I am worth and take the emotion out of the equation!
freemakemoneyonline 3 years ago
Great explanation. Never knew you could expand the possiblities to 3x3 matrix. Could their be more possibilities (eg hard soft medium and another one?). Also I saw that you did not fill all the squares in, is it required or is it just part of the uncertainties derived from the lack of knowledge of the boss' behaviour under that situation?
Olwe90 3 years ago
Owle90 - There definitely could be more possibilities than the ones I filled out. You could consider a hard/med route, or med/soft route and try to anticipate what each of those would mean. In the case here I knew the simple answer would work fine so I didn't break things out further.
anuzis 3 years ago
your brilliant man ! =D
casandramar 3 years ago
could the theory not be extended even further to re open the "soft ball" collum for your boss? If he has no alternative surely you could, if you wanted to negotiate further?
iceicebabys 3 years ago
If he had no alternative then perhaps, but him playing a medium-ball game seems like it'd get him a better result than him going soft-ball. His soft ball would probably end with him getting a 1 and me getting a 3, whatever that is. I don't have a way to force him to choose that over a 2,2 so it's not something I'd expect. It may be like me asking for a raise and him giving more than I asked for.
anuzis 3 years ago
Or him paying your hard ball amount/his soft ball amount for two months then firing you and replacing you with someone cheaper...just a thought
lanetxgp1 3 years ago
If he had the option of someone cheaper it'd be best for him to play it up front.
anuzis 3 years ago
WOW how awesome was this. Dude, you are going to go places, i can see you becoming someone very succesful! :oD
nonameisavailable 3 years ago
Great story... Are scores based on a "gut-feeling" for the situation?
emperor1337 3 years ago
Scores are partially based on gut feeling, but more importantly you want them to reflect the value one outcome when compared to another. For example, pay raises of $20, $30, or $500 could be numbered 1, 2, and 3. However, it'd make more sense to rate them something like 1, 2, 10.
anuzis 3 years ago
haha, thats awsome.
NoSz4 3 years ago
clear, precise, great creation, great exeution - =D lets c more of these ^^
JasonJRY 3 years ago
good job, this was very interesting
volcomgenuine 3 years ago
sweet, thanks for the advice. lesson learned here is always to play hard ball until u get what u want.
spankyquest 3 years ago
Anuzis, if you could recommend me two game theory books, which would they be? I'm smart, but the extent of my knowledge on game theory is limited to the Wikipedia article and your videos. Thanks!
noonej 3 years ago
noonej - The only Game Theory book I've read was the text by Avinash Dixit & Susan Skeath. That said, I thought it was a great engaging read and it'd be possible to learn from without a formal teacher/class.
anuzis 3 years ago
Thanks, anuzis. I'll check to see if my library has it.
noonej 3 years ago
This would really only work based on situation, as you were the only one in state, and $300 was close to what you were originally suppose to be getting paid.
how would this work in different situations,
radtadfad 3 years ago
Situation is important for this to work, but it doesn't need to be $300/hr extreme. Any instance where you're underpaid and your employer will have a difficult time replacing you gives you bargaining power to begin negotiating.
anuzis 3 years ago
yes, understandable.. so this theory would not work if the job was saturated. Did you ever get a chance to make an updated one?
radtadfad 3 years ago
hey, I'm up at 5:30 am looking for something on games theory (i was lucky to find the clip i was looking for in Beautiful Mind, which is where i originally heard of it and got excited), but the Wikipedia was no help. your little graph did just the trick!! I would love to learn more.
outofaugsburg 3 years ago
verry good, the information from the diagram is obviouse but its amazing to have it in front of you just as with other things, im a programmer and im in the same situation as you were.
ilikebeubz 3 years ago
Best of luck to you!
anuzis 3 years ago
however, arent u assuming that Mr Z needs you so badly as he saves so much cost by paying you less?
if he were to pay you $300, why wouldnt he fire you and get another at $300 too as he knows tht you can be a possible tough player to ask for a pay raise in future?
prana888 3 years ago
Guessing from your pen, do you work from google?
freshpinesent 3 years ago
Could not agree more !
Game theory rules !
Great video Mike
do 4 ....5...6...
maismau 3 years ago
What's the actual name of the game?
Gettinghitonattheban 3 years ago
to apply this method you have to have worthy game ...
magnifysumthn 3 years ago
How about a video on how to use a tripod?
ace11rothstein 3 years ago
Great idea! Make the video and I'll watch it.
anuzis 3 years ago
LOL, didn't think you'd actually respond. BTW, myb, I didn't realize you were going to tilt the camera to a chart. Score -1 for me.
Still, considering you make $300/hr working with computers, you think you could whip this video up in Flash then post it?
ace11rothstein 3 years ago
Michael,
Great video. Liked the game theory applications. Were/are you at the U of M, Ann Arbror? It is my understanding that by seeing what possibly can happen using game theory, you felt more confidence. So it was confidence that did the trick, right? Thanks for posting.
mamatalu 3 years ago
Mamatalu,
Thanks for the feedback. Yes, I was at UofM Ann Arbor. The increase in confidence likely helped some, but knowing how my employer would react based on his payoffs was also very helpful.
anuzis 3 years ago
i understand your videos, but the concept of 'game theory' is stil vage. What is it exacly? like a definition or something. thanks.
joetjoeb123 3 years ago
Game theory is the concept of how people behave in strategic situations.
Quillipod 3 years ago
I really enjoyed this video. I'm really interested in seeing chapter 2. Thanks!
carmelexi 3 years ago
I rarely comment on videos because I loath Youtube comments in general, But this video peaked my interests a great deal. I really enjoyed how you made a scientific theory applicable to the social/business situation that you were in at the time, truly a hand well played.
I'd be interested in seeing more, personally.
r0b0tkiller 3 years ago
I have a video myself applying game theory to solve another problem, known as King Solomon's dilemma. So I know game theory. What impresses me is the extreme popularity of this video. Nice way to present the theory to the general public.
reijunyan 3 years ago
i enjoyed this. chapter 2 plz
CatzDaLegit 3 years ago
excellent tactic i hope it will work out for me too.
kendacho
jahnteher 3 years ago
thanks for the theory .. It'll be helpful I am sure of it..
Thanks again
reverend900 3 years ago
nice video but as you say ..you were the only one in town, what if there were more people to hire? how long will it take your ex-boss to train another guy? and how much will he save?I believe you can play this only when you think you dont care to be fired or not and most of the times you know you cant play hard with your boss,youll never win .regards
crisskiss 3 years ago
crisskiss - good questions to be asking. it's all about the underlaying principles. there's no silver bullet to get paid way more than you're worth, but if you develop a skill in high demand there will always be ways to leverage it.
anuzis 3 years ago
You have to consider that if there were another guy he wouldn't work for 12 dollars per hour.
joaonedeff86 3 years ago
Then change the weights...anuzis put -5 for his boss's weight just for that reason. Otherwise he wouldn't have chosen that box; he might have gone for the medium type which would have gotten him a 2.
dylanhockey 3 years ago
great job! really interesting
come1here1you 3 years ago
Interesting, but for anyone thinking of trying this approach to negotiating a pay raise - take note of the unique situation that "anuzis" was in. He knew the market value of his labor and the fact that he was being grossly underpaid presented the high opportunity cost for his boss, so unless you are "the only ___ in the state", paid 5% of the market wage, you won't have as much bargaining power. Should have split the $75K he saved by underpaying you too :) ($2400/mo, r=4%, 28 months... ~$75K).
regnar07 3 years ago
High five guy.
KagatoIuchi 3 years ago
yah, defo helpful;)) 10 out of 10 lol
Jahodka1 3 years ago
So I just started really getting into game theory.
And from so far you've clarified parts of more than I've seen from other people's attempts.
I really admire this video not just cause its a way to convince your boss to give you a raise but also its applicable in other scenarios as well.
Great job.
Keep me posted.
ScAestheticxXx3 3 years ago
great day to yu to sir. BRILLIANT. when i become the next Donald Trump...yu are so in my work force. you'll manage my business. I need more, and maybe we should work together.seriously
yvonnita2 3 years ago
awesome, really happy for u dude!
allensugar 3 years ago
250 $/hr? holy fuck
bsol07 3 years ago
please, post chap 2, 3, 4, 5,...
write2warriors 3 years ago
I enjoyed your lesson. Post more!
mrwonderful619 3 years ago
Thanks for the lesson! What a great story- Best of luck in future endeavors, my friend!
Takezou07 3 years ago
hey michael, hope you show also the possible calculation on finding the payoff.
elletramaestrado 3 years ago
Great lesson. I wish you great success. You are a great teacher. Keep going. Good luck.