A Game Theory Application: Is Donald Trump Actually Crazy?

This is a part of my Game Theory Series. I have several equity analyses in the works, but it’s fun to spin the brain in a different direction. Please let me know if you have any questions or comments!

There are mixed views about the President, but he tweets enough content to fuel several blog posts. There are mixed reviews on the political system, like always, and this is not a political blog. This is a finance blog.

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Grim Trigger Strategy: How Many Boats Should We Send?

Let’s say that there are three fishermen, and each day they individually decide how many boats to send out to catch fish in the local lake.

A fisherman can send out one or two boats, and the daily cost of a boat is $15. The more boats sent out, the more fish are caught. However, since there are only so many fish to be caught on a given day, the more boats another fisherman sends out, the fewer fish the remaining fishermen can catch. Things need to be shared, but not everyone wants to share. Overexploitation is very real.

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