Posted October 4, 2011 By Presh Talwalkar. Read about me , or email me .

The other day I was running errands when I suddenly realized I needed to visit my bank.

The issue was the time was 5:02pm, and I was not sure if my bank was open or if it had closed for the day.

I was debating whether to take a few minutes to drive by my bank, or to first complete my other errands, one which would take 20 minutes and other 40 minutes.

What task is best to do first?

a. check the bank

b. do the 20 minute errand

c. do the 40 minute errand

The answer is not difficult. But I find the situation can be instructive to highlight a couple of game theory concepts, explained below.

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"All will be well if you use your mind for your decisions, and mind only your decisions." Since 2007, I have devoted my life to sharing the joy of game theory and mathematics. MindYourDecisions now has over 1,000 free articles with no ads thanks to community support! Help out and get early access to posts with a pledge on Patreon. .

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The answer

I was with my dad who instantly came up with the proper decision (I jokingly said it’s because he reads this blog).

The suggested route is to do the 20 minute errand first. The reason is if the bank is closed already, then there is no point checking it. If the bank is not closed, then it will be open for at least another 30 minutes. Hence, do the 20 minute errand, and then go back to check the bank.

This is an intuitive answer, but underlying it is a couple of game theory concepts. I believe the situation can be instructive for the following two ideas.

Schelling / Focal points

When I saw the time was 5:02pm, I was worried the bank might not be open.

Why was that?

Notice that in theory banks can close at any time they wish. If they choose to close at 5:03pm every day, then they are legally allowed to do so.

But there’s something very strange about picking a closing time like 5:03pm. Employees would be annoyed at having to stay 3 minutes past the hour, and customers might be confused as to why a bank would pick an unusual number.

It is customary and more natural for banks to close at a “round” time, like 5:00, 5:30, or 6:00.

These closing times are examples of the game theory concept of a Schelling point (also known as a focal point).

A focal point is a time or strategy that is natural or special in some way. They are important because they allow people to coordinate without communication.

In the classic example by Thomas Schelling, people in an experiment were told they were to meet a stranger in New York city. Where would they choose to meet? Overwhelmingly people chose to meet at the Grand Central train station at noon–they would try to pick a prominent spot at a special time to increase the odds of meeting.

To return to the problem at hand, the concept of focal points allows us to infer the bank would close at a round time, such as 5:00, 5:30, or 6:00. You may say you know this by experience, but deep down that psychological reason has a strategic element to it.

Now we understand the bank’s strategy, let us return to our strategy and figure out our best response.

Dominant strategies

We know the bank was already closed at 5:00, or it could either close at 5:30, or at 6:00 or later.

Now we consider how our actions will relate to those contingencies.

–If the bank closed at 5:00, then there is no point in visiting the bank at 5:02pm. We should just go ahead with our errands

–If the bank closes at 5:30, then we could visit the bank, or we could try the 20 minute errand first. The 40 minute errand is obviously a bad idea

–If the bank closes at 6:00, then there is time to do one errand

The following chart depicts which strategies will allow us to visit the bank.

As you can see, there is no point in visiting the bank first. If the bank is already closed, then it would just waste a few minutes to visit the bank first.

If the bank is still open, we inferred it must be open for at least another 30 minutes. Therefore, it would be wise to do the 20 minute errand and not waste time checking at the bank. And doing the 40 minute errand is equally unwise, as you could miss the bank if it closes at 5:30.

Doing the 20 minute errand is therefore better than doing anything else.

This is an example of a dominant strategy: a strategy that is better than any other option, regardless of what strategy you are facing.

Naturally, when you have a dominant strategy, you should play it.

In conclusion

You may say this was an overly complicated way of coming up with an obvious solution.

But the point is that strategic thinking and game theory are not some arcane concepts: they can be useful for even daily decisions like this. And the same lessons can help in harder decisions, like how to split the bill and how to design multi-million dollar auctions.