The most dangerous delusion is thinking that we can make decisions based upon "objective reality." We cannot perceive objective reality without filtering it through our subjective mental models. Paraphrasing Poe, is all we see or seem but a dream within a dream?
The gap between seeing and seeming is crtiical to Sun Tzu's strategy. What is usually translated as "deception" in Sun Tzu's work is better described as the awareness that 1) there is always a difference between perception and reality, and 2) we can only use that difference by accepting it. Even though his system is largely about making good choices, this is the one area where we have no choice. We cannot choose between reality and perception. We must deal with both at once, learning to make good decisions based upon "subobjective information."
Decisions Based on Perceptions
People make decisions based upon conditions, but everyone's idea of conditions is only based upon their subjective impressions. The less information we have, the more our subjective impressions differ from the physical reality. The fewer information sources we have and the more alike those information sources are, the narrower our perspective. The more information sources we have and the more variety in those sources, the broader our perspective.
"Insider" information is information about a situation that is held exclusively by one person or group of people. Insider information usually refers to information available only to those who are in a specific position. Outsiders are not privy to it. In chess, opposing players have access to all relevant information except each other's plans. This means that chess has very little insider information. This is very different from a contest such as poker, where each player has access to information about his or her own hand that no one else has. In real-life competition, insider information is critical to future events, but by definition most people do not have it.
No Absolute Measures of Position
There are no absolute values in strategy. All judgments about positions are relative. These judgments are made by individuals from their own subjective perspective. There is no such thing as an objective condition that we call "strength." Strength and weakness are determined by comparing positions. From that comparison, we identify positions we suspect are stronger and weaker in one area or another. However, our judgments about conditions must be tested. Based upon that test, we can then say that various aspects of those positions are relatively stronger or weaker.
In these relative comparisons, insider information is always in play. We may have insider information about our own positions, but we do not have insider information about the positions that we are using for comparison. So no matter how good our inside information, we are always making decisions out of ignorance.
For a complete description of the process of advancing positions in competitive business environments, we suggest you read our book 9 Formulas for Business Success: The Science of Strategy.