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  3. Game Theory: Metagames
Economics & Markets

Game Theory: Metagames

Model #0693Category: Economics & MarketsDepth to apply:
4 min read

On this page

  • Core Idea
  • How to See It
  • How to Use It
  • Founders & Leaders
  • Connected Models
  • One Key Quote
  • Summary & Further Reading

Contents

  1. 1. Core Idea
  2. 2. How to See It
  3. 3. How to Use It
  4. 4. Founders & Leaders
  5. 5. Connected Models
  6. 6. One Key Quote
  7. 7. Summary & Further Reading
·Economics & Markets
Section 1

Core Idea

A metagame is a game about which game to play — or how to change the rules, the players, or the payoffs. Instead of taking the game as given and choosing a strategy, you ask: can we alter the structure so the equilibrium favours us? Examples: changing the rules (regulation, standards), adding or removing players (alliances, M&A), or changing information (commitment, signalling). Metagame thinking is second-order: "given they best-respond to this game, what game would we want to be in?" For founders, it's the difference between playing the hand you're dealt and changing the table — platform rules, partnership structure, or narrative that shifts how others play.
Section 2

How to See It

Strategy
You're seeing Metagames when someone asks "how do we change the game?" rather than "how do we win this game?" — e.g. redefining the category, setting a standard, or changing who's at the table.
Platforms
You're seeing it when platform design (rules, fees, features) defines the game that participants play. The platform owner is playing a metagame: choosing the game that yields the best outcome for the platform.
Negotiation
You're seeing it when one party tries to set the agenda, the format, or the BATNA. That's metagame: shaping the game before playing it.
Section 3

How to Use It

Before optimising within a game, ask whether you can change the game. Can you add or drop players? Change the rules or the information structure? Commit to a strategy that forces a favourable response? The highest-leverage moves are often metagame: choose the game, then play it well.
Decision filter
"Are we optimising inside a fixed game, or can we change the game — rules, players, information — so that the new equilibrium favours us?"
As a founder
In competitive and partnership strategy, separate "playing the game" from "choosing the game." Invest in metagame moves: category creation, standard-setting, platform rules, or structural deals that put you in a game you can win. Then execute in that game.
Section 5

Founders & Leaders

Diane HendricksChairman, ABC Supply; building materials distribution
Hendricks built scale and supplier relationships that changed the game for contractors — effectively choosing a game (national scale, supply-chain advantage) that local players couldn't replicate. Founders can adopt the lens: before competing harder in the current game, ask whether you can change the game (structure, rules, players) to your advantage.
Section 7

Connected Models

Reinforces
Game Theory
Metagames sit on top of ordinary games: the "move" in the metagame is to select or alter the underlying game. Same players and rationality; the object of choice is the game form.
Reinforces
Mechanism Design
Mechanism design is metagame from the designer's perspective: choose rules (mechanism) so that equilibrium behaviour yields desired outcomes. You're designing the game so that best responses implement your goal.
Leads-to
Second-Order Thinking
Metagame thinking is second-order: "they will best-respond to this; what do I want this to be?" Second-order thinking in strategy often means asking how to change the game, not just how to play it.
Section 8

One Key Quote

"The power to constrain an adversary may rest on the power to bind oneself. Choosing the right commitment is choosing the right game."
— Thomas Schelling, The Strategy of Conflict
Section 11

Summary & Further Reading

Metagames: games about which game to play. Change rules, players, or payoffs so the equilibrium favours you. Use when the highest-leverage move is to redefine the game — platform design, category creation, structural deals — then play the new game well.
01
The Strategy of Conflict — Thomas Schelling (1960)
Book
Commitment, credibility, and changing the game.
02
Zero to One — Peter Thiel (2014)
Book
Creating new games (markets, categories) rather than winning existing ones.
03
Mechanism Design — various (NBER, textbooks)
Article
Designing games (mechanisms) to achieve desired equilibria.

Why this matters next

mental modelsSecond-Order Thinking

Game Theory: Metagames applied the Second-Order Thinking mental model

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Game Theory: Metagames applied the Leverage mental model

mental modelsStrategy vs Tactics

Game Theory: Metagames applied the Strategy vs Tactics mental model

mental modelsNarrative

Game Theory: Metagames applied the Narrative mental model

mental modelsScale

Game Theory: Metagames applied the Scale mental model

mental modelsGame Theory: Metagames

Game Theory: Metagames applied the Game Theory: Metagames mental model

Frequently asked questions

What is Game Theory: Metagames?+

Game Theory: Metagames is a mental model used for better thinking and decision-making.

How do you apply Game Theory: Metagames?+

To apply Game Theory: Metagames, identify situations where this framework is relevant, then use it as a lens to evaluate your options and decisions. The model is most useful when combined with other complementary mental models.

What category does Game Theory: Metagames fall under?+

Game Theory: Metagames falls under the Economics & Markets category of mental models. Other models in this category can be found on the Economics & Markets hub page.

Why is Game Theory: Metagames important?+

Game Theory: Metagames is important because it provides a structured way to think about problems that would otherwise be approached with intuition alone. Understanding this model helps you avoid common reasoning errors and make better decisions.

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On this page

  • Core Idea
  • How to See It
  • How to Use It
  • Founders & Leaders
  • Connected Models
  • One Key Quote
  • Summary & Further Reading

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