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  1. STRATEGIC GAME THEORY FOR MANAGERS Diplomacy The Board Game of International Intrigue Client Logo

  2. Today’s Presentation Overview of Diplomacy Overview of Game Theory Aspects of the Game Lessons Learnt from playing Diplomacy Applying Lessons from Diplomacy to the Real World

  3. Diplomacy is a board game set in pre-World War I Europe – the objective of the game is to control Europe Game Board • Each player represents one of the seven powers of Europe: • England • Germany • France • Italy • Austria-Hungary • Turkey • Russia

  4. The game is based on military strategy and negotiating skill with chance playing almost no role Overview of the Game Rules of the Game • Diplomacy is a game of: • Negotiations • Alliances • promises kept • promises broken • In order to survive, a player needs help from others • In order to win, a player must eventually stand alone • Game Board consists of 34 supply centres • 22 occupied and 12 unoccupied at start of game • Each country starts with control of 3 supply centres (except Russia with 4) • Each controlled supply centre represents one piece on the board • When a player captures a new supply centre they can build another fleet or army • Winner is the player who captures 18 supply centres • At the beginning of each turn, players meet together one-on-one or in small groups to discuss their plans • Then orders for each piece are written in secret • Then the orders for all countries are revealed and resolved simultaneously

  5. Game Theory Aspects of the Game • Win-Win & Win-Lose • Initial moves are win-win since 12 unoccupied supply centres can be shared • Alliances can create further win-win opportunities • However, once all supply centres are occupied the overall game becomes win-lose • Simultaneous Moves • Each player must write their moves in secret and all orders are resolved simultaneously • Sequential Moves • Game consist of up to 40 simultaneous interactions • Therefore, many opportunities for players to be rewarded or punished for prior moves • Uncertainty of Information • Uncertainty over the moves of other players • Uncertainty as to the intentions of other players • Uncertain as to whether information obtained during negotiations is credible or not • Important role of Signalling • Actions of other players speak louder than words

  6. Lessons Learnt from playing Diplomacy • Player’s do not always behave as expected • Nationalistic pride (e.g. Russian player trying to occupy their German homeland) • Player’s may make a incorrect move deliberately • Maintains reputation through plausible deniability rather than obvious back-stab • Importance of understanding the personality / traits of the other players in the game • Importance of Reputation and Signalling • Importance of always hoping for the best but planning for the worst • Importance of forgiveness when it is mutually beneficial • Importance of committing to a long-term strategy

  7. Applying Lessons from Diplomacy to the Real World • Trust • Attention to detail • Deviousness • Rationality vs emotion • Complex inter-relations • Difficult to anticipate others’ moves • Many players adds to complexity • Rationality powerful • Calculations / permutations difficult • Emotion can override