Equilibrium is a State of Mind | Gagen MacDonald

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Equilibrium is a State of Mind

Jan 08, 2015

Do you remember the movie A Beautiful Mind? It told the story of John Nash, who won the Nobel Prize in Economics for his work on Game Theory. Game Theory is the study of situations involving conflicting interests – gains and losses among opposing players. Put in the context of another vernacular, it’s the study of traditional win-lose relationships.

What made Nash famous was his theory on Equilibrium. Players are said to be in Nash Equilibrium if each one is making the best decision that he or she can, taking into account the decisions of others. In Nash Equilibrium, decisions are not made in isolation – the outcome is dependent on the consideration of others.

It got me thinking about the importance of considering others’ motivations.

Often we approach planning from a competitive perspective– we’re so focused on driving for an expedient result that we try to drive people to a particular conclusion in the process. We define success in terms of convincing others to our point of view. And we get frustrated when people have different perspectives. We call them “irrational” or “blockers.” We set up a traditional “win-lose” scenario.

Julio Ottino said something in our conversation that has stuck with me: “Never confuse conflicting priorities with irrationality.” We can learn a lot from Nash Equilibrium. In those situations where I’ve slowed down the process, allowed for some messiness, and evolved my point of view based on others’ perspectives, I’ve always landed in a better place. The process takes more time, but ultimately it’s more effective. That’s because a plan isn’t a static document, it’s the commitment of a group to take action together. It requires the consideration of others to be sustainable.

It takes practice and discipline. So I’m interested in hearing from you: Do you get frustrated when others’ thinking “messes” with your planning process? And when that happens, how do you get into that equilibrium state of mind?

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