Predicting opponents’ moves based on long history can be disadvantage, analysis finds
In some competitive situations, it pays to have a short memory.
Banking on recent trends can be a winning strategy when everyone else is stuck in the past, a study to appear in Physical Review E demonstrates. Researchers used game theory to determine how to maximize the payout in a basic game and found that there’s a limit to the effectiveness of relying on prior results to predict other competitors’ behavior. When players look too far into the past, or when too many competitors rely on old data, shorter-term thinkers can swoop in and profit. “It’s really nice work,” says Damien Challet, an econophysicist at École Centrale Paris in Châtenay-Malabry, France.
Because the game studied is so simple, the results don’t neatly apply to most real-world competitive encounters. But the idea that there’s a threshold beyond which relying on the past becomes counterproductive