Download to read offline
Uploaded byJohn Willis
Breaking Bad Equilibrium - Devops Connect 2016 LA
The document discusses concepts from game theory and behavioral economics including: - Bad equilibrium, where no player has an incentive to change their strategy despite undesirable outcomes for all - Nash equilibrium, where the optimal strategy for each player depends on the other players' strategies - Pareto efficiency and inefficiency, relating to situations where someone can be made better off without making others worse off It also discusses cognitive biases and human irrationality that can lead to suboptimal decisions, as highlighted by the work of Kahneman and Tversky, and suggests strategies like increasing visibility, flow management, and embracing failure to change equilibrium to a better outcome.
More Related Content
Similar to Breaking Bad Equilibrium - Devops Connect 2016 LA
Breaking Bad Equilibrium - Devops Connect 2016 LA
- 1. Breaking Bad Equilibrium JohnWillis Twitter: botchagalupe GitHub: botchagalupe
- 2. It’s a strategythat all the players in the game can adopt and converge on, but it won’t produce a desirable outcome for anyone. Bad Equilibrium
- 3. • Economics • Wealth •Markets • Work Life Balance • Techical Debt • Cooperation • Risk • Burnout Equilibrium Good Bad
- 4.
- 8.
- 10. A concept ofgame theory where the optimal outcome of a game is one where no player has an incentive to deviate from his chosen strategy after considering an opponent's choice. Nash Equilibrium
- 13. Sarah Steven Split Steal Split Steal 100%50% 50% 100% 0% 0%0% 0% Nash Equilibrium
- 14. Is a stateof allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. Pareto Efficiency
- 15. A situation isinefficient if someone can be made better off even after compensating those made worse off. Pareto Inefficiency
- 20.
- 21.
- 22.
- 23. Forty years ago,Israeli psychologists Daniel Kahneman and Amos Tversky wrote a series of breathtakingly original studies undoing our assumptions about the decision-making process. Their papers showed the ways in which the human mind erred, systematically, when forced to make judgments in uncertain situations. Their work created the field of behavioral economics, revolutionized Big Data studies, advanced evidence- based medicine, led to a new approach to government regulation, and made much of Michael Lewis’s own work possible. Kahneman and Tversky are more responsible than anybody for the powerful trend to mistrust human intuition and defer to algorithms.
- 24. • Human Irrationality •Heuristics • System 1 (fast) • System 2 (slow) • Availability Bias • Regression to the Mean • Overconfidence • Illusion of Validity
- 27. • Undesirable Outcomes •Pareto Inefficient • Nash Equilibrium • Human Irrationality • Cognitive Bias • Overconfidence Bad Equilibrium Good Bad
- 28. How to Changethe Game?
- 29. • Make workvisible • Manage WIP • Manage Flow • Create high trust • Embrace failure Devops Advanced Good Better
- 30. Really Hard Stuff GoodExcellent • Increase Headcount • Increase Buffers • Rethink SLA’s • Psychological Saftey
- 31. You are eitherbuilding a learning organization… or you will be losing to someone who is… Andrew Clay Shafer