Why the Game of Numbers?

Posted by JaniP on 19 Apr 2018

Introduction

I believe that two concepts, namely Games and Numbers, which accompany humanity for a very long time and seem very basic at first sight, hold great secrets. The secrets that were discovered by many but used to their advantage by few over the long evolution process. Although it is difficult to determine the exact appearance of either Games or Numbers in a human prehistoric timeframe, archeological evidences indicate that Numbers (ishango bone with markings from 12000 BC) predate Games (carved and painted stones from 5000 BC).

One of the assumptions which support this argument is that Games as an organized social interaction in many ways rely on Numbers. However, there is also a different argument that some primitive societies never "invented" or used Numbers, but they did play Games. Since the introduction on this point can take a very unproductive path, similar to discussion about the egg and the chicken, let's just wrap it up by acknowledging that both concepts are really really ancient and as one of the core elements embedded into the history of mankind, social interaction and progress.

The Reason

Nevertheless, the reason behind the discovery of Numbers seems very different opposed to one behind discovery of Games. Numbers, together with simple mathematics, were probably a necessity after the introduction of organized human dwellings like cities. It was crucial to determine quantities of either storage or consumption of goods e.g. grain and livestock, in order to manipulate food resources over less fertile (dry, cold, etc.) periods. Another main milestone was probably unlocking the power of Numbers supporting the endeavour of constructing larger buildings or statues.

On the other side Games are an integral part of all cultures and are one of the oldest forms of human social interaction. To quote Wiki definition: "Common features of games include uncertainty of outcome, agreed upon rules, competition, separate place and time, elements of fiction, elements of chance, prescribed goals and personal enjoyment".

Taking all this into consideration I would argue that the main reason behind Games was (and arguably still is) the necessity and the role of core "tools" for successful skill building and learning processes.
In the same way I do understand the quote from cultural historian Johan Huzinga who saw games as a starting point for complex human activities such as language, law, war, philosophy and art.

Here comes Revenue Management

At this point the question should arise: "And what does all the above have to do with Revenue Management"? Well let's try to establish a common understanding of the term Revenue Management. To make things "challenging" we can find and discuss a number of definitions from different sources but probably most complementary are two from HSMAI reference documentation:

  • RM is the ART and SCIENCE of predicting real-time customer demand at the micro market level and optimizing the price and availability of products to match that demand,
  • Selling the right product, to the right customer, at the right time, for the right price.
The first one being exact and technically detailed and the second one more descriptive and broad. From this definition we can further extract some of the key elements that compose it and are crucial in order to put Revenue Management into action.

Key elements for successful Revenue Management are: to be able to establish an appropriate organizational structure, sustain a certain business culture, understand economics on micro and macro levels, be able to build strategic and tactic approaches to issues, perform advanced analysis and act proactively.
Each of those key elements themselves require knowledge of certain rules that they operate within, they require certain skill sets and usage of specific tools, they contain elements of chance and uncertainty of outcome. On the other side some of them (like analytics) require exceptional handling of Numbers. Sound familiar?

Even more interesting is the beginning of the first definition: "RM is the ART and SCIENCE". How can something be ART and SCIENCE at the same time? In our time SCIENCE is perceived as something strict, systematic and methodological whereas ART is creative, imaginative and emotional. Although they seem to be the opposite, those two have many things in common. They both require certain skills and talents, they both have the purpose of explaining (usually the universe) and they both operate within certain sets of rules (although some modern artists would disagree with that on the ART side).

I personally read this definition in the sense that Revenue Management represents the union of the most common properties of ART and SCIENCE. The union of acquired skills and innate talents. Being methodical and creative at the same time, being communicative and analytical, being able to see "big picture" as well as the "small detail".

Epilogue

Today's world depends heavily on data and at the core of this data are Numbers. Vast amounts of Numbers. In order to control it and make it useful, businesses need to be creative (elements of fiction), methodological (agreed upon rules), have to be able to think strategically, predict the outcome and calculate risk (elements of chance) and work towards a common goal (prescribed goals). Revenue Management within hotel industry complies with all of the above. Although it has a very serious impact on the business focused on profit in the environment of heavy competition, I still perceive it as a game - "The Game of Numbers".


References