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Prediction

Prediction by Bruce Bueno de Mesquita Vintage, HK$170

The Copenhagen summit on climate change, Iran's nuclear threat, Pakistan's efforts in fighting terrorists. Most of the world can only guess at what the newspaper headlines on those issues will be. Bruce Bueno de Mesquita claims to know the outcomes, but not because he is a specialist in those areas. Applying game theory, which centres on the belief that people act rationally and in their own self-interest, the professor of politics at New York University has become the go-to person for forecasting on national security, public policy, corporate fraud and more. The author, whose computer models apparently come up with correct predictions 90 per cent of the time, came to prominence in 1979 following the collapse of government in India. By building a data set based on his knowledge of Indian politics and feeding it into his model, he came up with a correct prediction few would have made. Game theory was invented by John von Neumann and Oskar Morgenstern in the 1940s, and improved by mathematician John Nash a decade later. Readers will find different ways in which to use game theory, among them clinching the best price on a car.

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