How to use game theory to buy a car:
Research the car carefully on the internet and decide exactly what you want.
Determine the colour, the extras, everything. Then, call every dealer within, say, a 20-mile radius.
When they answer, tell them exactly the car that you want. Then inform them that you are calling all the dealers in the area and asking about the same car.
You are going to buy the car at 5pm from the dealership offering you the best deal. You will ring back soon and seek a price — the full price, with nothing at all left to be added on later.
The dealer may object that if he gives you a quote over the phone, the next dealer will just come in £50 lower. You simply tell him that, yes, this might indeed happen.
That is why, you explain, he has to give you the very lowest price he humanly can, so as to avoid anyone underbidding with a price the dealer would have been willing to accept.
When the witching hour arrives, you go to the dealer with the best offer, cheque in hand, and pick up your car. If there is any change in the terms, you go to the second-best showroom, although this shouldn’t be necessary.
What has happened here? You have forced the salesman to provide you, in the form of his lowest price, all the information he has about the real cost of the car. The advantage has moved from the dealer to you.
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