Daryl Fairweather is the chief economist at Redfin, where she helps renters, homebuyers, and home sellers navigate the decision of where to live and how to pay for it. She is also a member of the academic advisory council of the Federal Reserve Bank of Dallas and a regular contributor to Forbes. Formerly, she was a senior economist at Amazon. Her work has been featured in 60 Minutes, Today, the New York Times, and Bloomberg.
What’s the big idea?
Understanding game theory and economics can help people feel less anxious and more confident about life’s most important questions. Everything from buying a house, chasing a promotion, to choosing a life partner—all the decisions we make are moves in the game of life. Even if the game is unfair, knowing its rules is what it takes to know its cheat codes—and win, even if at a disadvantage. With the right approach, anyone can find a path to the top in career and life.
Below, Daryl shares five key insights from her new book, Hate the Game: Economic Cheat Codes for Life, Love, and Work. Listen to the audio version—read by Daryl herself—in the Next Big Idea App.
1. The economy is an unfair game, but you can still win.
When I began my career, I had no idea how to get from where I was (an entry-level worker) to where I wanted to be (an accomplished career woman). There was no manual to consult and no set of rules to follow. I had to figure it out on my own, with no guarantee that hard work would translate to success. But I had my knowledge of economics and game theory. At the University of Chicago, I learned from my PhD advisor, Steven Levitt, that economics is useful in all sorts of unexpected places, and I hoped it would be useful in navigating my career.
After a few false starts pursuing and quickly abandoning various career paths in academia and the private sector, I found myself wondering: Why do some people seem to win so easily while others struggle? I was prepared for my race and gender to put me at a disadvantage, but I knew those disadvantages could be overcome. My grandmother, Norma Sklarek, was the first Black woman to be a licensed architect in New York, and then she was the first licensed architect in California—and this was before Black people had civil rights or women had employment protections. If she could find success, I knew there must be a way that I could, too.
Then I realized that the economy is a game of winners and losers. Like any game, success isn’t just about hard work—it’s also about understanding the system and leveraging it to your advantage. The economy isn’t fair; the game is rigged. Our economic system rewards those who already have wealth, connections, and access to information. However, this doesn’t mean you can’t succeed. The key is to comprehend how incentives operate, how markets function, and how people make decisions. If you understand the rules of the game, you know the cheat codes.
2. You can win by making strategic choices based on economics.
Economics and game theory provide cheat codes: ways to predict outcomes, optimize decisions, and gain agency within an unfair system. Economic thinking is comprised of tools that tease out causality from correlation—cause and effect from mere coincidence.
Early in my career, I was disappointed by books that claimed to hold the secrets to success because the authors didn’t seem to understand the economic circumstances that led to their own successes. If they didn’t understand that, how could they possibly understand my circumstances and what would help me achieve my specific goals?
“There are systemic reasons why you don’t see many books on economics authored by Black women doctorates.”
In behavioral economics and statistics, there is a concept called survivorship bias, which is the tendency to focus on successful outcomes while ignoring or dismissing those that did not make it through a selection process. This bias can cause a skewed perception of what factors lead to success. I am not immune to survivorship bias, either. Had I not succeeded in my career, I wouldn’t be in a position to write this book. There are systemic reasons why you don’t see many books on economics authored by Black women doctorates. I am an outlier. In recognizing that, I can look for an understanding of how that happened—how I happened. That exercise, set against the innumerable things economics can tell us about the world, produces lessons for anyone, regardless of their economic or social circumstances.
Understanding economics is incredibly useful when navigating life’s biggest turning points, such as: choosing a career, applying for a job, earning a job offer, negotiating salary, deciding whether to quit a job, understanding how family choices impact career choices, buying or renting a home, deciding where to live, and deciding how to spend time and money.
3. Winning in life, love, and work is about being a good negotiator.
Learning when and how to negotiate is one of life’s most difficult and consequential challenges. Early in my career, I asked my boss for a raise and got rejected. That was brutal. But many years later, after honing my negotiating powers, I successfully negotiated the salary I deserved.
Negotiating skills are critical because everything is a negotiation. Your salary, relationships, and job opportunities all depend on your leverage. The main thing to know when negotiating is that power comes from having better options. The party most willing to walk away holds the upper hand. This applies everywhere:
- In the housing market: When there are more homes for sale than buyers, buyers have better options and can negotiate lower prices. Conversely, when buyers outnumber sellers, sellers have many offers to select from and can pick the highest offer price.
- In dating: The partner who is least afraid of breaking up because they don’t mind being single or are confident about finding a new partner will have more leverage. They will usually have more power in relationship negotiations about what constitutes cheating or whose career is prioritized. However, relationships are worsened by constant tit-for-tats and ultimatums.
- In the workplace: When an employer thinks an employee is replaceable, the employee will have little to no leverage to negotiate salary or workplace conditions. But if the employee has a rare skill set and competing job offers, they can negotiate higher pay and better conditions.
When you understand what your options are relative to your employer, romantic partner, or any other negotiating partner, you can determine whether you have the power to get a better deal. If you assess that you don’t have enough negotiating power, you can focus on improving your options to get a better deal in the future.
4. Knowledge is the ultimate advantage.
In any game, the player with more information has the upper hand. This concept—asymmetric information—explains why first-time car buyers get scammed, why employers keep salary data secret, and why successful people always seem one step ahead.
When buying a home, the first-time buyer who knows nothing about the housing market will be at a disadvantage compared to the experienced home seller who knows precisely how much each house in the neighborhood is worth. For the buyer, this disadvantage is tricky. To overcome it, they must determine what the seller knows and whether the seller hides information. They must imagine the world through their negotiating opponent’s eyes.
Consider the classic scenario of buying a used car from a dealership. The buyer may know little about cars, while the seller, who negotiates deals daily, has deep expertise in car values, inventory, and each vehicle’s condition. Economist George Akerlof won a Nobel Prize for showing how this knowledge gap allows sellers to push low-quality cars while keeping high-quality ones out of reach to ignorant buyers. The same happens in job markets, real estate, and even personal relationships. If one side holds all the information, the other is at a disadvantage.
So, how do you counter this? The next time you negotiate, try to see things from your opponent’s perspective. Take an educated guess about what information they have that you don’t, and try predicting what moves they will make. Identify your opponent’s objective. Don’t go into a negotiation without understanding what your opponent wants.
“The next time you negotiate, try to see things from your opponent’s perspective.”
Identify whether your opponent is lying or withholding information. Your opponent might mislead you about their objective, so don’t take what they say at face value. Instead, consider whether your opponent benefits from misleading you. If you are worried your car dealer is trying to sell you a lemon, have a trusted expert inspect the car on your behalf. If you fear your employer is misleading you about opportunities for raises or promotions, ask other current and former employees their opinions.
It’s impossible to know everything, so at a certain point, you must take a risk and make your move. An educated guess is better than a blind guess.
5. Every player must decide for themselves what games are worth playing.
Not all games are worth playing. The key is knowing which reasons for playing matter to you. Some games are worth playing because they are enjoyable. The point of playing the Hokey Pokey is to have fun. There are rules to the Hokey Pokey, but there are no winners. No trophy is awarded to the person who best follows along with the musical instructions. Having fun is the only reward.
Some games are worth playing for the lessons they teach along the way. Playing chess can make you a better chess player, and practicing negotiating can make you a better negotiator. Player abilities aren’t fixed—through learning, whether in the classroom, on the job, or in games, people can develop skills that transform their abilities. The fact that experience alters skills makes choosing what game to play more complicated. The outcome isn’t just win or lose. It’s often: win or lose, and either way, learn something along the way. How much you learn and how that might increase your odds of winning future games should be considered when choosing what game to play.
Some games are worth playing because of the prize. A lottery game is worth playing for the jackpot. Similarly, an employee trying to win a promotion is motivated by the prize of a better title or a pay increase. Winning a job offer, a raise, or a promotion are all examples of external prizes. External prizes are determined and awarded by entities other than yourself. However, there are many games where the prize is determined internally. Spending or saving money in a way that brings you meaning is an internal prize.
Some games are objectively worse than others. Not all games allow you to improve over time. A gambler at a roulette table doesn’t get better at winning. And some games are designed to keep you playing, even when you’re losing. Bad relationships, dead-end jobs, or exploitative industries thrive on keeping players trapped. The key is knowing what you personally value. If a game isn’t serving you, it’s time to walk away and invest in a better one. In the long run, the games you choose within the economy determine the life you live.
To listen to the audio version read by author Daryl Fairweather, download the Next Big Idea App today:
