I finally watched Crazy Rich Asians yesterday. It was not bad!

With all the hype, what surprised me was the lack of reviews from an economic perspective. There has been some articles like this, positing that it is Chinese culture which prompted Rachel to willingly lose in the mahjong game. While there is some truth to the article, attributing everything to “culture” doesn’t seem to explain many other situations in the movie.

So let’s go back to economics and human nature to explain more stuff. Rachel Chu is after all a professor who specialises in Game Theory at a top American University. She also happens to be very consistent in her actions when viewed through an economic perspective.

What is Game Theory?

According to Econlib, game theory is:

“…the science of strategy. It attempts to determine mathematically and logically the actions that “players” should take to secure the best outcomes for themselves in a wide array of “games.” The games it studies range from chess to child rearing and from tennis to takeovers. But the games all share the common feature of interdependence. That is, the outcome for each participant depends on the choices (strategies) of all. In so-called zero-sum games the interests of the players conflict totally, so that one person’s gain always is another’s loss. More typical are games with the potential for either mutual gain (positive sum) or mutual harm (negative sum), as well as some conflict.”

In layman’s terms, you may think of a “game” as a “scenario”. Usually economists use payoff matrix to document the gains and losses to each stakeholder (“player”). It is also worth noting that there are one-off games, and there are repeated games.

When we study game theory in college, many assumptions are in place to keep the theory as easy to understand as possible.For example, there will be an assumption in textbooks that people know what they really want.

Theory Vs Reality

This premise is not true in reality because of cognitive biases, various degrees of denial, unresolved emotions/ childhood etc. Humans rarely know what they want unless they have a high degree of emotional and self-awareness.

In my many observations, I noticed that most people may know about game theory but not know how to apply it into real life because of these reasons:

• People don’t know what they really want out of the game. This is usually due to a lack of emotional awareness;
• People don’t know what other players really want out of the game. This is also due to a lack of emotional awareness;
• People don’t play to win; they play not to lose. This is true when there is some skin in the game;
• Many people don’t know how to reframe “the game” into one that is win-win.

And this is precisely why Rachel Chu is such a great inspiration to learn game theory from! Rachel Chu is not only an economic professor who specialised in game theory–she is also a lady with high emotional and self-awareness. It is very clear that she knows herself, her self-worth, and respects humanity in all their mistakes and errors.

When you combine these two elements, you get someone who can apply game theory in a humane manner. To me that is a smart and very very attractive lady–because not only can she play “hard” (logical, rational), she can also play “soft” (shows humanity, vulnerability, empathy and big-heartedness).

And there is no lady who is more attractive than that! Here are the three scenarios:

[Scenario #1] Poker Scene: Rachel Chu Vs College Boy

The movie opened with a scene that is of Professor Rachel Chu playing poker with her student. This scene is the most simple manifestation of game theory that people may get immediately.

Her cards were shit and her student’s cards were so-so. She went “all-in”, and the student folded. When the cards were revealed everyone was shocked that her cards were that shit.

Professor Rachel Chu then commented that “You played not to lose; I play to win”.

Payoff Matrix

Lying here is defined as “acting as though your cards are better than the other party’s”.

Obviously, because Professor Chu’s cards are so shit, her only best way (we call it “dominant strategy”) is to act as though her cards are way better than her student’s. This prompts the student to be scared, and hence he played conservatively and told the truth.

You will see this “nothing to lose” theme repeating itself throughout the movie.

[Scenario #2] Girl Fight Scene: Rachel Chu Vs Bitches

So Rachel was invited to the hen-party of her bf’s best friend’s fiance. Other rich ladies were invited also, and they were really jealous of Rachel because she is nowhere as rich or pretty as they are. So they–via a carefully designed messaging group–planned to shame and embarrass her.

Definitions of winning:

• To the jealous bitches: Embarrass Rachel Chu, make her look like a fool, make it clear that she is the outsider and she should give up.
• To Rachel (retaliatory): Not play this game because there is no payoff to her even if she gets attention to her the injustice done to her, or even if she gets “justice done”.

Payoff Matrix

So from the above payoff matrix, it is clear that the dominant strategy of these jealous bitches is to stir shit, whereas the dominant strategy of Rachel is not to play.

So she made a great decision of choosing to not continue the drama, to not give them the satisfaction of showing the negative reaction they want.

If Rachel plays the shit stirring method (reactionary), then this potential single-game might become a repeated game which works less and less to her favour, because then she will be playing by the jealous girls rules.

So she played well–as expected of a game theory professor with high self-awareness.

Now, if the goal is to not play this stupid game, is it possible to talk to the player 2 to ask them to stop stirring shit? The answer is no, because the reason why they are jealous is because they are facing the very same issues all their lives, of not being good enough! These ladies crave for attention and like to be stuck in the endless circle of comparison because it is what they are used to their whole lives.

Would they like to lose to such a common and average-looking girl? Of course not–it must have felt really unfair to them!

So the next question to ask is whether Rachel could achieve a higher payoff by solving and tackling their root problems. The answer is no, because she cannot tackle such a deep-rooted problem. The answer is also no, because she should not be tackling it as a rational person, as there is literally no benefits to her and super high opportunity cost.

Furthermore there may not be consent for we simply do not have the rights to go around poking other people’s bubbles. If your bubble is poked, who is to say that your life will definitely improve?

We simply have to accept that we are not saviours of the world! By the way, this is also a core pillar of Econs1101–Positive economics deals with “what is” and normative economics deal with “what should be”.

[Scenario #3] Mahjong Scene: Rachel Chu Vs Eleanor Young

Definitions of winning:

• To Eleanor: Get Rachel Chu to break up with her son. Because Rachel Chu’s family background is not good enough.
• To Rachel: Convey the message to Eleanor that her son’s happiness is her top priority.

Payoff Matrix:

Now this game is a bit more complicated, because there are two games playing out in this scene: the Mahjong game, and the mind games between Eleanor and Rachel. Both games parallel each other.

So you see, after Rachel chose to lose the Mahjong game, she created the context that she made the choice to not accept her bf’s proposal because she wants Eleanor to remember that it is her who allowed her bf’s future happiness to whoever his mom approves of. 

Because of this created context, she could answer to herself in future regardless of the outcome (mom’s approval or not), and move on well. That’s a really well-created context from a rational woman!

Therefore, once you can define winning and losing properly for any party, you can apply game theory onto anything in life. The most difficult part is not understanding the theory (in fact that’s the easiest)– the most difficult part is to understand thyself and the people you are playing with.

Takeaways from the three scenarios

• Vulnerability and communication is key. It is important to have people around you whom you can be vulnerable to. This keeps one sane and helps people understand what triggers them. This can also help people become “whole and complete” (Landmark forum language, lol)
• Some games are better off not played, no matter how tempting. For instance, why spend time and energy to fight with bitches when the payoff is so little or non-existent? Because of how the game is designed in this context, any potential payoff is in the form of “attention”.

If you think about it, what is the value of attention if it cannot be converted to love, meaningful/ deeper relationships or money? Yet many causes of conflict in our lives is caused by the lack of attention, or from people craving attention.

People are sometimes very, very vulnerable in this area, especially when in their childhood they are made to feel that they are not important or not good enough.

Why did you think lonely people pay for sugar babies, or why did you think people even need to pay for sex?!

• Framing and positioning of games are important. And once the design of the game is fixed at the start, the end is certain.
• It is important to test assumptions and have an awareness of various options available. That will broaden one’s set of options and alternatives. Obviously, Rachel has a higher sense of awareness as compared to Eleanor, that there could be a win-win situation too for both. She also spoke right to Eleanor’s “root”: That most, if not all girls, would probably not be good enough for her precious son.

The best part is that because of this framing, Eleanor will then have to face herself. The “blame” game is now shifted from Rachel back to Eleanor, and the latter probably then realised that no girl will ever be good enough, just like how she was never good enough. It’s perhaps this that prompted her to accept Rachel.

• Knowing your and the other player’s definitions of “winning” is key.And emotional awareness is essential to doing this. After knowing these definitions and their “roots”, we can consider if we (1) could and (2) should solve or resolve the root causes of drama. Very often, it is not worth your time and effort taking on (1) and (2) unless said person is paying you a lot of money LOLx.

This is why it is just too bad sometimes to leave people as they are, for some games are better off not being played.

What do you think of the above analysis? Are there any other scenes in this movie that you can analyse with game theory? Would love to hear from you–let me know!