What We’ve Chosen To Ignore (And Why)

In a game called “Power Grid Factory Manager”, two to five players are challenged with running a factory for five turns. The three sources of randomness (exogenous shocks) are the starting bid order, the increase in the price of energy, and the three starting factory  equipments available upon the very first turn. These three sources of randomness are enough to produce all the variety required. No dice here. No reliance on luck.

Managers are given the same starting conditions, and have two resources – workers and money. Everybody is paid on the same schedule, where the input costs are subject to random fluctuations and capital must be balanced. There are very large degrees of freedom involved. The person with the most money at the end of the game wins.

The game is simple in practice and complex in theory. It is an excellent microcosm of managerial behavior.

You typically have to chose what you’re going to ignore as part of the strategy formulation. Strategy is choice. Good strategy is reinforcing choice. There are at least seven factors that can go into a Pearson Table: money, revenue, production, storage, workers, machinery, and bidding order. This creates a 49 celled table. And worse, there are reinforcing effects. It’s a complex system made of very simple things. And this is a gross abstraction of reality!

What I’m trying to settle on is this: selective intelligence might mean that once a heuristic/algorithm has been agreed upon, it requires selective ignorance to survive through the five rounds of this particular game without screwing up your end state vision. You have to ignore something because you don’t have enough time to understand absolutely everything.