Tuesday, April 20, 2010

The Nash Equilibrium: Optimizing Team Innovation

C. Engdahl
The Big E of Big E Toys

My goal is to increase the odds of success for each player on the floor, but without negating the odds of success for everyone else in the process.”

Steve Nash - point guard for the Phoenix Suns, 2-time NBA Most Valuable Player
_____

I’ve decided to create a new award. It’s called the John & Steve Nash Innovation MVP award.

I studied a fair amount of game theory as part of my post-secondary education - including basic auctioning systems and classic Prisoner Dilemma scenarios, to more complex competitive systems and the subtleties of theorists like John von Neumann, Morgenstern, and Nash. In fact I was in graduate school and became pretty excited when John Nash (the subject of the book and subsequent movie A Beautiful Mind) won the 1994 Nobel Prize in Economics.

When I launched Big E Toys about six years ago I did so with a board game called Coopetition (pronounced co-opetition) – the underlying premise of which was loosely based on the 1950 Ph.D. thesis of John Nash. At the time, Coopetition was the only party-genre board game to incorporate all four essential classic gaming elements – skill, knowledge, luck, and strategy. What made it truly unique was the interdependence of the players in the game. Because it incorporated both competitive and cooperative elements, the actions of any one team affected the outcome and decision making strategy of every other team and vice versa.

This time of year, with the advent of the NBA playoffs, I’m often reminded of another Nash - Steve Nash, point guard for the Phoenix Suns. A truly remarkable player. A player whose innovative playing style coincidently loosely embodies the theoretical framework of something called the Nash Equilibrium – the concept of a game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing his or her own strategy. As you might have guessed, the Nash Equilibrium takes its name not from NBA star Steve Nash, but rather Nobel Prize-winning economist John Nash.

“My goal is to increase the odds of success for each player on the floor, but without negating the odds of success for everyone else in the process,” Steve Nash has said. Some may think of Steve Nash as the quintessential “team player”, a player that routinely sacrifices himself or foregoes his own scoring opportunities for the good of the team (he has after all been the NBA assist leader multiple times.) It’s more than this though. He simply has an innate understanding of what it takes to optimize his teams’ performance.

Do you have anyone like this on your innovation team? I’m not talking about your “all-stars”, your “scoring leaders”, or anyone who “sacrifices” himself for the team and thus becomes a non-factor himself. These might be obvious choices for an Innovation MVP award. But I’m talking about someone that inherently knows how to make everyone better while simultaneously performing up to one’s own potential. Do you have one of these people on your team?

In an article written in November of 2005 for what magazine I don’t remember, author Chuck Klosterman writes:
“The reason Nash destroys people is because he transmogrifies the Suns’ offense; he maximizes the potential of every player on his team, regardless of how much (or how little) raw potential each one possesses. He will consciously create short-term sacrifice if that loss yields long-term social benefit to players who would be mediocre as self-reliant individuals. From each his ability, to each his needs.”

If you know someone worthy of the John & Steve Nash Innovation MVP award, feel free to send your nominations to me at chip.engdahl@gmail.com.

1 comment:

Marcus said...

Maybe this is a better game theoretical construct than 'Nash equilibrium' to describe what you're getting at?

http://en.wiktionary.org/wiki/Pareto_improvement

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