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Between airports, airplanes and transit lounges

Of Traffic Jams, Equilibrium and John Nash

(Photo credit and source)

Deep in the middle of the MBA, our strategy professor introduced John Nash and Nash’s equilibrium. I didn’t get it. Since the course was a case based, no final exam, high end elective, it was all right for me to not get Nash and manage barely with a low end B. Despite that low end B, Bruce Greenwald taught me everything I know of strategy, value investing and competition.

And a few mornings ago, stuck in a not so unpleasant jam on a rotary off a street in Karachi, it all came together for me. As long as you do what is in your best interest, keeping the interests of others in mind, you will end up in a state which represents your optimal (best possible) out come. In a traffic jam, it represents making it across the street without a ding, zing or scratch on your well taken care of three year old fifty thousand klick Civic. In real life, it may represent something larger and more meaningful.

Surprisingly enough there is also a two century old preamble by Adam smith on the same topic that you will find of interest.

That is all the intellect I can pull on a slow Friday afternoon in Ramadan.