[mathattack]

I became a big fan of game theory when I realized that it's the simple effects that matter, not the complex ones. At a prior employer, I started thinking about, "Why are so many consulting firms willing to screw the vendor they're working with for short term gain?" Then I realized it was because, "They don't think they'll ever work with us again, so it's a single game of Prisoner's Dilemma"

After that revelation, I started pushing towards longer term incentives to incent better behaviors. "We're only working with a smaller subset of vendors, who can count on repeat business, as long as they don't get kicked out of the club. But they need to make investments in advance to show they're serious."

In general getting clients and partners to repeat games of Prisoner's Dilemma rather than 1-offs is the key to trust, and long term profitability.