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Asymmetries, expected scores, and competitive advantage

Chess TalkPosted by Lars Bo Hansen Sun, July 26, 2015 16:26:16

As always over the summer, many Open chess tournaments are in progress with huge rating differences in Round 1. It is not uncommon for some players to be playing opponents rated 200-300 rating points lower – and vice versa.

Although the starting position is even - most experts agree that chess is a draw with perfect play - the higher rated players are expected to win based on previous performance. That’s the core of the ELO system, where players gain or lose rating points for the world rankings by comparing their actual results to their “expected score” in each game.

But how to win, if the starting position is just even? Because each move creates asymmetries that can be exploited. The starting position may be even and symmetrical, but the symmetry – albeit not necessarily the equality - will soon be broken, for example by pawn moves or trades. Trade-offs are made, for example one player gives one of the two bishops in exchange for damaging the opponent’s pawn structure (like in the Nimzo-Indian or French Winawer) or he concedes the center to his opponent’s pawns in the hope of attacking it from afar with pieces (like in the Gruenfeld Defense or Reti Opening).

These trade-offs lead to asymmetries that give the player with the best sense of the relative value of both sides of the trade-offs a change to grab the advantage – getting the better side of the deal, so to speak. That’s what better and more experienced players often exploit to live up to their roles as favorites: They assess asymmetries and trade-offs more accurately than the opponent.

The same process unfolds in business strategy. Two firms, even if operating in the same industry selling more or less similar products, are never identical in their trajectories; all business actions create potential asymmetries that cumulate over time. The shrewd strategist identifies these asymmetries, accurately judges the relative value of each trade-off, and may be able to obtain a competitive advantage by exploiting them.

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