Bruce Bueno de Mesquita is the author of The Predictioneer’s Game, a book about using game theory to get what you want in day-to-day life. Mesquita argues that we can predict and engineer the future by understanding the self-interest of those involved in making decisions. What does that all mean? Well, over at Big Think, Mesquita has provided a short video explaining how to use these ideas to buy a new car.
Here are the basics of Mesquita’s method:
So let me lay out how to buy a car. It’s very easy. Decide exactly what car you want to buy, make, color if it matters to you, options and so forth. Then do not go to a dealership. Let your fingers do the walking. Telephone all of the dealers who sell the vehicle you’re interested in who are, say, within a 50 mile radius, a 25 mile radius, 75, however far you’re willing to go.
To each of them make the same statement: â€œHi, my name is so and so. I plan to buy such and such a car today at 5pm. I’m going to buy it from the dealer who gives me the best price. What is your best price?â€
This technique will probably sound familiar to some of you. I’ve mentioned it here at Get Rich Slowly several times before. Five years ago, for instance, I shared this video about how to buy a new car without getting screwed. The idea is the same as Mesquita’s.
I’ve seen this method work first-hand. In 1995, Kris and I used this technique to purchase a new Honda Civic (but we faxed dealerships instead of phoning them). We sent out a letter that looked something like this:
My name is John Roth. I would like to purchase a white Honda Civic with option A, option B, and option C. What is the best price you can offer me on an in-stock Civic that matches this description? I am faxing this letter to every Honda dealer in the Portland/Salem area. This weekend I will purchase the vehicle from the firm that offers the best deal.
Some dealerships refused to participate, but a few responded with competitive pricing. The one we chose offered a smooth, hassle-free transaction. It was awesome! And Kris is still driving that car today, seventeen years later.
[Big Think: How to buy a car using game theory]