{"id":860,"date":"2008-03-06T01:00:59","date_gmt":"2008-03-06T09:00:59","guid":{"rendered":"https:\/\/systematichr.com\/?p=860"},"modified":"2008-03-06T01:01:17","modified_gmt":"2008-03-06T09:01:17","slug":"game-theory-and-hr","status":"publish","type":"post","link":"https:\/\/systematichr.com\/?p=860","title":{"rendered":"Game Theory and HR"},"content":{"rendered":"

If you haven\u2019t figured out by now, I have a degree in Economics.\u00a0 Game theory as published by the Stanford Encyclopedia of Philosohy is \u201cthe systematic study of interdependent rational choice. It may be used to explain, to predict, and to evaluate human behavior in contexts where the outcome of action depends on what several agents choose to do and where their choices depend on what others choose to do.\u201d<\/p>\n

I often hear people saying that they have to wait on making a decision because XYZ business unit is working on something and decisions must await the outcome of that process.\u00a0\u00a0 Or on the other hand, ABC project is in process and their decision will impact future needs.\u00a0 One clear and common example is when Finance is looking into Oracle and if they buy it, HR will end up on Oracle as well.\u00a0 My question is this:\u00a0 Why do we halt planning just because someone else\u2019s decision might change our decisions?\u00a0 Why don\u2019t we just build in multiple sets of assumptions and get a picture of what we\u2019d do in various scenarios?\u00a0 This would do at least two things for us:<\/p>\n

    \n
  1. It allows us to get ahead of the game, realizing what our possible best options are in these scenarios and adequately preparing for them when the time arises, instead of being 6 months behind.<\/li>\n
  2. It allows us to realize what our own preferences are.\u00a0 It\u2019s entirely possible that if XYZ happens and we are forced into the PDQ decision, we won\u2019t like PDQ.\u00a0 Therefore, early planning will allow us to influence the XYZ project.<\/li>\n<\/ol>\n

    Basically, evaluating game theory combined with a probability equation gives us a pretty decent picture of the future.\u00a0 If there is a 20% chance that the absolute best solution for HR will occur, and a 60% chance that the least optimal solution will be necessary, would it not be important to clarify the spectrum of possibilities now?\u00a0 If the least optimal solution has a significant increase in overall costs from the best solution, would the stakeholders of the other, contributing project want to know?\u00a0 Hopefully so.<\/p>\n

    Imagine taking game theory to the benefits world.\u00a0 We might practice this already and just not know it.\u00a0 Here, we\u2019re actually playing with a game theory that is in the outcomes of our choices, not inputs.\u00a0 We choose a portfolio of benefit solutions and our costs are driven by the choices of our employees.\u00a0 Based on some educated guesses, we can understand quite accurately what our costs will be, and attempt to influence those costs with various vehicles.\u00a0 For example, communications and learning can be used to influence choices or even improve healthy behaviors.<\/p>\n

    I don\u2019t know that we formally utilize game theory enough.\u00a0 It\u2019s an incredible way to understand options and make decisions before you\u2019re stuck with a limited set of possibilities or an environment that was created for you.<\/p>\n","protected":false},"excerpt":{"rendered":"

    If you haven\u2019t figured out by now, I have a degree in Economics.\u00a0 Game theory as published by the Stanford Encyclopedia of Philosohy is \u201cthe systematic study of interdependent rational choice. It may be used to explain, to predict, and…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","footnotes":""},"categories":[27,47,8],"tags":[],"class_list":["post-860","post","type-post","status-publish","format-standard","hentry","category-data-metrics","category-governance","category-strategies"],"_links":{"self":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/860","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=860"}],"version-history":[{"count":0,"href":"https:\/\/systematichr.com\/index.php?rest_route=\/wp\/v2\/posts\/860\/revisions"}],"wp:attachment":[{"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=860"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=860"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/systematichr.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=860"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}