Student Founders: NYU Stern MBA Uses Game Theory To Forecast World Events & C-Suite Negotiations

Tell us about ‘The Quad’ project at CNBC and how you got involved. 

This is a great MBA story. So, I licensed this computer model, and then COVID happened. What do you do when you have something like this, but you can’t meet people in person and talk? I said to myself, ‘I’ve got to go big and wide.’ So I went to the media. I went to CNBC and I said, ‘Hey, look. I’ve got this really interesting computer model. Would you like to do something?  And it would be great for me as an entrepreneurial business school student.’ And they jumped on it. 

I worked with Ted Kemp, managing editor of CNBC International Digital, who’s really a great journalist, I have to say. He’s very smart and forward thinking. He proposed ‘The Quad’, and I then went on this journey of completing the largest, most complicated application of the Bueno de Mesquita model in its entire history.

What kind of data are you feeding into this model, when you’re talking about making forecasts on human behavior?

First, I need to understand who’s involved. I make a list of individuals associated with the negotiation, and there’s all sorts of ways to source that information. While experts don’t forecast future events well, they do know things. So I interview them about the different actors. I measure the relative influence of the different actors compared to each other – how focused they are on the issue, how resolved (or not) they are on a certain outcome. What is their position? Do they favor a negotiated agreement or would they be more comfortable to walk away from a deal? I can take an issue and code it in a way that reflects the bargaining process, and input the information on all the actors associated with the negotiation. I can then take all this information about these individuals, and through the process I run, and offer predictions with over 90% accuracy. 

What is the most interesting prediction to come out of the CNBC model, in your opinion?

In the project, the Russia analysis indicated there are significant figures within the Russian Security Council and some energy oligarchs who favor China giving material concessions over the South China Sea claims. That was a result which came as a surprise for lots of folks.

Then, less than three weeks after the project was released, Vladimir Putin told CNBC in an interview that China “does not need to use force” on Taiwan and acknowledged the need for negotiations for competing maritime claims in the South China Sea. 

The Russia analysis is among the most interesting parts to come from the output because it appears there is an interesting and nuanced debate going on among different figures in Russia as to how to balance the country’s relationship with China while being mindful of Russia’s relationship with other countries like India and Vietnam. That analysis outperformed a number of world leading experts who didn’t think Russia would deviate from China’s position on Taiwan.

And so you were doing all of this while you were doing your MBA commitments, correct?

Yes, that is correct. So you have to imagine that I show up to an MBA class and I do my thing — corporate finance — and I leave, and I jump on a call with a world expert from whatever country. CNBC published a list of the 37 individuals I worked with to gather information for the model (12 of them asked that their name not be used publicly.). They range from former government officials, senior leaders of different groups, and recognized experts in their fields. I would be talking to these different individuals in between classes. 

It was a very unusual, interesting MBA experience. You’re following the pathway that everybody’s doing, but at the same time, you’re starting a business, forecasting major events, and working in tandem with CNBC. 

Are you still gathering information and feeding it into the ‘The Quad’ model, or is that work done?

This is the interesting thing about the model. I only need the information at a given point, and the model updates that information over time. Some people will ask: Can you update your beliefs? Well, we have a machine that’s updating its own beliefs. In certain situations, I might go in the middle of the game and do something. For example, if you asked me to shape an event to a client’s preferred preferences, I might go in and update something along the way. But generally, no, the machine updates its own beliefs.

The Quad Project CNBC

Is the CNBC project ongoing?

All sorts of interesting things have happened since the report was published in September. I did a TV interview with CNBC, and we’re going to be putting out a documentary as part of ‘The Quad’ project. We’ve had discussions about doing other interesting things as well.

CNBC has linked ‘The Quad’ forecast project to a number of its reports, so it’s really something that’s evolved with their reporting over time. I think it even inspired some reporting afterwards. 

What are your plans for The Canary Group in the future?  

I am right now working on The Canary Group and growing the business. That’s my focus right now, but I’m open to all sorts of interesting opportunities in the future.

Why did you choose to pursue an MBA while you were also trying to build a new company?

Let me tell you something really great that I’ve found: The MBA gives you a rich knowledge about business, business finance, and how people work on a commercial level. It would amaze you how much value an MBA adds to analyzing foreign policy decision making all the way to corporate predictions. It’s a very enriching experience, and it makes you that much of a better person. 

Why Stern?  

I was originally at NYU, so it just seemed fitting to continue to work on the stuff I do while at Stern. Stern also has one of the best finance departments in the country with a number of world leading faculty.  I think the best way to explain it would be: When you come to an MBA experience, like Stern, you meet very talented and smart people but also very emotionally intelligent people. 

What advice do you have for other MBAs who are managing a startup while in the course?

My advice would be to always reach out to other people, keep trying, and show kindness to everyone that you work with.

 

Are you a student founder? Poets&Quants is interested in talking with you about balancing the demands of pursuing an MBA and running a new business. Email your story to kristy@poetsandquants.com. Read our other stories in the series below.

THE STUDENT-FOUNDER’S DILEMMA: WHY THIS STARTUP CEO IS GETTING AN MBA

STUDENT FOUNDERS: ‘RETAIL NERD’ EXPLAINS WHY AN MBA WAS THE RIGHT DECISION FOR HER STARTUP

 

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