19 February 2013

Who says caterpillars and milkweed cannot do game theory?

"Outgrow to outcompete" strategies succeed in both nature and business
George ILIEV


My favourite game in Game Theory is the little known "sailboat race": When you are the leading boat in a race and the second strongest competitor is right behind you, all you need to do to maintain your lead is simply to mimic every move the second boat makes. You must have seen this in Formula 1 racing as well.

The biggest threat posed by this strategy is that a third boat that does not play by your rules may overtake both of you while you are locked in the mirroring strategy. Therefore, when other competitors are around, your best bet is not to look back but to focus ahead.

This is what milkweed seems to be doing: First it evolved a range of defensive mechanisms against caterpillars, such as hairs on the leaves and poisonous latex in the plant's tubes. However, in response caterpillars evolved leave-cutting techniques that stop the flow of latex, while the monarch butterfly caterpillar has even developed immunity to the toxicity of the plant. 

At some point this outcompete/co-evolve strategy must have got too complicated and risky for the two sides locked in the game and some plants just took the fast lane. Instead of defending against the caterpillars, many of the 38 species of milkweed focus on repairing and growing faster. The strategy of outgrowing the enemy, rather than defending itself, seems to be working for the milkweed.

In the corporate world, Sony was applying this forward-looking strategy for decades. Rather than fighting over market share with its next biggest rival, it would simply create a fundamentally new category of product and outcompete everyone in this newly created blue ocean: from the radio transistor and the walkman to the Blu-ray DVD and PlayStation. Apple and Google seem to be doing the same though they still dominate most of their historical market niches. In East Asia, this strategy of shedding old technologies and industries and focusing on the new ones has a name derived from nature: The Flying Geese model of economic/technological development.

2 comments:

  1. Here is another game theory example of the application in nature of the Sailboat Race: one species evolves to protect itself from another only to fall victim to a third.

    The water flea defends itself from a predator larva by growing too big for the larva to swallow when it senses chemical trails of the larva's presence in its environment. However, the bigger it gets, the more parasitic yeast it consumes, which eventually kills the flea. This two-step reaction process contradicts the "healthy herds" hypothesis that predators (the yeast in this case) keep their prey populations healthy by killing the sick and the weak. An ecological balance in which the flea species survives can be reached only because the parasitic yeast is seasonal, so the flea's too-big-to-be-eaten response saves its life the majority of the time (whenever it is not yeast season).

    (Scientists Uncover an Unhealthy Herds Hypothesis,
    http://www.sciencedaily.com/releases/2011/06/110623130743.htm)

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  2. William Hamilton "tackled the thorny question of why sex exists when asexual creatures can reproduce so much faster than those that mate."
    "It is, he suggested, the result of an arms race between hosts and parasites."
    (The Economist, Darwin’s retriever, March 16, 2013
    http://www.economist.com/news/books-and-arts/21573528-biography-man-behind-modern-evolutionary-theory-darwins-retriever)

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