Rock Breaks Scissors

The Power of Prediction

Whether you’re squaring off in a tennis match, playing poker or picking stocks, effective players guess what their opponents are going to do. In that way, prediction is a foundational skill in competition. However, you don’t need to be a mind reader to make accurate guesses. People base their behavior on unconscious patterns, even when they are aiming for spontaneity, randomness or surprise. Learn these patterns to make more accurate guesses about your opponents’ strategy.

The key to unpredictability is randomness – the absence of a pattern. The brain is a pattern-recognition machine that seeks meaning and order in any phenomenon. As a result, your brain does not do a good job of recognizing randomness and, in fact, will impose an illusory pattern on a random sequence. Because of this bias toward patterns, being truly spontaneous is hard.

Exploit this predictability to gain small advantages. For instance, when you offer customers a choice of three options, they tend to choose the middle one. Make the middle one slightly more expensive, and you’re ahead of the game. Knowledge of such patterns gives you a statistical advantage over your ...