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January 2021

Sebring Courses Employ Nash Equilibrium Theorem Without Realizing It

By: Steve Eubanks

The book and film A Beautiful Mind explore the brilliant genius and tragic schizophrenia of American mathematician John Nash, who won the Nobel Prize for his breakthrough work expanding on Adam Smith’s invisible hand theories. But what both the book and movie gloss over is the seminal work of the Princeton professor, the Nash Equilibrium, for which he won the Nobel Prize.

While complex in its proof, Nash Equilibrium is, at its core, game theory that says each participant’s strategy is optimized when considering the decisions of other participants. So, every player wins because everyone gets the outcome they desire.

It fights the hand because it goes against the zero-sum formula that says every competitor is striving to gain market share or to “win” at the expense of others who seek the same outcome.

If that sounds complicated, it shouldn’t. In golf, we see it all the time. Two courses fight for one golfer. Operators lower prices, offer incentives, work hard to make their courses better, all under the guise of beating their competitors. That’s what Smith saw as the invisible hand of markets.

Nash said, not quite. And while he didn’t play golf, if he did, Nash might have said the two courses would be better off not fighting for the one golfer but being cognizant of each other’s interests and working together to bring in five more. 

Operators in Sebring, Florida, didn’t run their problems through Nash’s equations. In fact, when they created the Citrus Golf Trail, John Nash’s name never came up. But his theorem is hard at work there. A group of operators, sensing that they were killing each other by fighting for the same golfer, chose to band together to bring five more golfers into the fold. 

“We have a great collection of golf courses in the area but none had the budget to market itself in an impactful way,” said Casey Wohl Hartt of Visit Sebring. “When the Citrus Golf Trail first formed and presented their concept to Visit Sebring, we liked that (the course operators) were working together in a cooperative and coordinated manner to address their marketing needs. This led to Visit Sebring providing a 1:1 match of marketing funds raised by the Trail. We later evolved into Visit Sebring temporarily taking over management of the Trail and providing direct marketing assistance to Citrus Golf Trail as our local golf brand.” 

There are five courses involved: Sebring Municipal, Sebring International, Sun n Lake, River Greens and Pinecrest. On their own, they languished. Together, and out of necessity, they have created a model that can be emulated around the country.

“The Citrus Golf Trail has significantly increased visibility and brand awareness for our area golf market,” Hartt said. “Although prospective players may not always know exactly where the Citrus Golf Trail is located, they do know - based on the name - that it is in Florida. The Trail has been a great way to attract attention to our courses and increase golf play in the destination. With the inclusion of Inn on the Lakes as the Trail’s hotel partner, it helps Visit Sebring achieve our goal of increasing overnight hotel stays.”

Next year, the trail will host a national scotch-foursome amateur event modeled after the original Haig & Haig, which later became the JC Penny Classic.

It’s just one more way that considering the decisions of others ensures that all involved reach their ultimate goals. And that is a beautiful thing, indeed.

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