The destiny of the world's greatest country is linked to the dynamics of this simple game
'Chicken', by the way, is a game similar to 'blink', where children try and outstare each other. The first one to blink is the loser. One of the versions of this game was seen in an Aamir Khan movie, where he rushes at an oncoming train, jumping out of the way at the last minute. The guy who travels the longer distance is the winner; the other guy, hopefully, is dead.
Now think a little deeper about this. Two guys want to settle a duel, one has to die and the winner gets the girl (old filmy line). You have to take risk, and the winner gets a reward.... sounds familiar?
So you have to run fast, but at the same time, you have to know your limitations. The latter is perhaps more important than the former. Insurance companies, day traders and derivative writers know this equation too well. They also know that your risk is finite but immeasurable (the train runs over you), while the return is infinite (depending on how badly you want the girl) but measurable.
Think deeply about the previous paragraph. I haven't got it wrong.... how can something be infinite but measurable?
Answer: Once you have figured out the equation within a certain range of probabilities, you can play the game again and again, till all your friends/rivals are dead and you have all the girls in the colony.
The Toofan Mail comes at a particular time, at a particular speed and traverses a particular piece of track near your home over a certain number of seconds. You can get a Probability Distribution Function (PDF) over a large number of observations. Now practise your running, but set your 'distance achievement' targets with a margin of safety. This means also making sure that you are doing a statistical bet, i.e., instead of betting for one specific girl, you bet on all the girls in the colony. This is called diversification. This magazine talks a lot about it.
Make sure you stay alive. You can't do much with a girl, if you are already dead. The margin of safety has to be set with a certain target probability that you will get the girl, usually 95 per cent (GE calls it 2 Sigma). Too high a margin of safety and you get no girl; too low a margin of safety and you won't know what to do with them. Don't ever try and get all the girls; you will be dead anyway. Satisfice, don't maximise.
Let me now make the game a little more complicated for you. Suppose you can buy 'insurance', i.e., in case there is a loss, somebody else pays up for you. In other words, every time you 'die', you can put somebody else's life on the table, for the sacrifice; somewhat in the spirit of Yudhisthira betting Draupadi. So every time you win a girl, you stake her life against the train, not yours. This assumes, of course, that lives, like money, are fungible.
Now, after winning a few women, you would want to reduce the margin of safety, to increase the probability that you will win the next girl too. This is called compounding. If the train hits you, just sacrifice one of your previously won women.
Let's make the game really complicated, now. Suppose, the train is invisible behind thick fog, and you are playing this game under zero visibility. You are no longer able to accurately predict the distance you can run without getting hit, nor the probability that you will get hit. This is called Fat Tails in Probability Distributions, better known as Black Swans, after Nassim Taleb showed that they are sudden, unseen and not ever anticipated. Hyman Minsky pointed out that they usually happen just when you are looking exactly the other way. So the train will hit you just when you are smiling at your waving girlfriend (or waving at your smiling girlfriend, as the case may be), like in the cartoon movies.
Now let's get this game even closer to real life. Suppose there was a loudspeaker, constantly announcing the time that a train is expected; but what you notice, after losing a few lives, is that the trains come in late or early, and the loudspeaker has no clue when the train is really coming in. He is just a fool with a loud voice, a.k.a. media/investment advisors. By the way, Indian Railways also has announcers like that, but they are harmless, because you know that they have no clue. Together with the fog, you realise, if you are still alive, that the blind are leading the blind. And that you are better off alone, because at least you have a life at stake, and hence, will be looking to get out of the way the moment you see the train. But the loudspeaker guy neither knows nor cares about who dies and who lives, as long as he gets paid. He is just gathering people around, and collects from the advertisers.
But this is where the game gets easier. If your rivals are too busy listening to the loudspeaker-wallah, and can't/won't do their own thinking, you just have to wait till they all get splotched by the train, and then you can collect your girl. You may not even have to run. From here on, it becomes more a game of brain rather than brawn. Actually, it was always that, except that it never looked explicitly like it.
These days, all this is available as a video game. All you need is a computer (sometimes not even that) and access to an NSE trading terminal. The only problem is: the girl is not for having. She is just here to sell wealth management services on behalf of your broker.
But if you know how to play such a complex, real-world game, why would you waste it on girls? You should go set up an insurance company, and become General Re or Berkshire Hathaway. Or better still, you get into derivative writing and become a Master of the Universe. You are then allowed to do "God's Work" at Goldman Sachs.
To get still better at the game, you bribe the train driver to slow down at your turn, and accelerate at your rivals' turn. You pretend to run, let your rivals run ahead, then shoot them in the back...anyway the train will then destroy the evidence. You get the loudspeaker-wallah to whisper 'insider stories' to your rivals; he is anyway too foolish to know the difference between a scoop and a plant.
And now for the real advice. It helps to be a cat. You not only run faster, you have nine lives and you produce nine kittens every time you get the girl. You run on padded feet, and you always fall on your feet.... so you get ahead without anybody knowing how far you have got! If you get big enough, you grow into a tiger... think about it!
Even governments play chicken.
The ongoing debate between Paul Krugman and the 'austerian' economists (led by Bill Bonner, for example) goes something like this:
• Krugman says that the US should try and spend its way out of trouble, ignoring the size of its already gargantuan budget deficit. Spending more borrowed money will keep everybody happy, creating much-needed jobs which will create additional income, taxes and 'multiplier effect' to get the economy back on its tracks; in a little while after that, tax revenues will turn up, the government will post a surplus and pay everybody off...and of course, all will be well!
• Predictably, the 'austerian' economists take the high moral ground, but they also have some hard-hatted realists on their side. One of the important stakeholders in this whole budget deficit debate is the bond markets, which will panic if they see huge deficits that refuse to go away. That will be apocalyptical for global markets, resulting in a meltdown similar to US 2008 and Euro 2010.
Use the allegory outlined above to understand how the destiny of the world's greatest country is linked to the dynamics of this simple game. Learn to play it, recognise when others are playing it, and keep at a respectful distance, when you see a fool playing 'chicken'.