In some competitive situations, it pays to have a short memory.
Banking on recent trends can be a winning strategy when everyone else is stuck in the past, a study to appear in Physical Review E demonstrates. Researchers used game theory to determine how to maximize the payout in a basic game and found that there’s a limit to the effectiveness of relying on prior results to predict other competitors’ behavior. When players look too far into the past, or when too many competitors rely on old data, shorter-term thinkers can swoop in and profit. “It’s really nice work,” says Damien Challet, an econophysicist at École Centrale Paris in Châtenay-Malabry, France.