Rock-paper-scissors, also known as roshambo, has determined the outcome of millions of extremely important decisions. (That’s a rough estimate.) The knowledge that scissors cut paper, that rock smashes scissors and that paper covers rock is one of the keys to getting through childhood. But Indiana University scientists wanted to know whether strategies for playing this simple game mirrored strategies for answering more important questions than who gets to sit in the front seat.
What they found was that people playing rock-paper-scissors quietly influence one another, as each player tries to anticipate what the other is doing. Here’s how one of the researchers explained it to Indiana University’s press department:
“People playing this kind of game subtly influence each other, converging on similar ways of reasoning over time. The natural analogy for the process is to a flock of birds veering in concert. Anticipation, may be the motor that keeps fads running in circles. It could be a source of the violent swings that we see in financial markets. Anyone in a bidding war on eBay may have been caught in this dynamic. If the bidders are tweaking their increasing bids based on the tweaks of others, then the whole group may converge in price and determine how those prices rise. The process isn’t governed by the intrinsic value of that mint-condition Star Wars lunch box, but on the collective dynamics of people trying to reason through each other’s thoughts.”
Basically, because everyone is trying to guess everybody else’s next move, the behavior of the group winds up converging on a pattern. This doesn’t just happen in rock-paper-scissors, either. Economists have seen this same effect in people playing money games, too. And it’s not only humans who do this. The paper explains:
Cyclic game dynamics have been observed in organisms that are not capable of higher-order reasoning. Animal behavior researchers have described the role of periodic dynamics in resolving coordination conflicts in the producer-scrounger problem. Rock-Paper-Scissors-relations, and cycles within them, have been identified among side-blotched lizards and in vitro and in vivo populations of E. Coli, and they have been implicated in the maintenance of species diversity.
In fact, you can test out your roshambo prediction skills against a computer who’s been watching games and learning the game. And here’s a video that describes the converging cycles using an analogy to The Princess Bride:
No one is saying you should use rock-paper-scissors to determine your next investment. But don’t think your broker’s system for making decisions works any differently.
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