Is Game Theory Worth a Damn?

The Aumann/Schelling Nobel has inspired much discussion over the intellectual usefulness of game theory. In response to Michael Mandel’s worry that game theory does us no good, Tyler offers a number of responses, and Mandel reiterates his concern. Over at Crooked Timber, John Quiggin discusses problems of indeterminacy in the absence of the common knowledge assumption. Drezner defends Schelling against Slate’s Fred Kaplan. Mark Kleiman notes that Todd Gitlin is a moron for claiming that Schelling doesn’t understand non-zero-sum games!

Unless we understand game theory to simply be the Aummann-ish formalism, with its ridiculous epistemic and behavioral assumptions, then it is probably not very useful. But it is better to see Aummann style game theory as a stylized limiting case of the logic of interdependent action, which is what game theory is the theory of. We can contrast between formal and substantive game theory, the latter being the very heart of social science and social and political philosophy. Thomas Schelling is the greatest living substantive game theorist, in the tradition of Hobbes and David Hume, but with the benefit of the discipline Nash, von Neumann, and Morgenstern (and others, including Aumann,) imposed upon game theory through formalization.

To move the subject toward my domain, let me assert that the reason contractarian political theories are superior to the alternatives is not due to the idea of a fictive contract, but because of the recognition of the centrality of patterns of interdependent action to social order. You can’t understand the good society until you understand society. And you can’t understand society without understanding interdependent behavior. But you can’t understand interdependent behavior unless you understand behavior. And to do that, you need to understand (1) how people represent their alternatives, and (2) how they order them, for which you need the cognitive sciences.

(Esoteric aside: Regarding Tyler’s five options for making game theory predictive, my sense is that (1) and (5) actually are one. The indeterminacy of the social world is a function of the indeterminacy of representation. Sooner or later the behavioralists will get around to discovering basic philosophy of language.  This also bears on Quiggin’s worries. For Kripkenstein reasons, previous behavior underdetermines the "rule" upon which one behaves, even if the rule is "maximize expected utility." If my strategy is a conditional rule sensitive to my representation of your strategy, which is a conditional rule sensitive to your representation of my strategy, etc., then an equilibrium, being a set of strategies, will be a slippery creature indeed. Thankfully, the in-principle indeterminacy of rules and representation need not worry us too much if there is stable regularity in the way we in fact tend to ascribe belief and motivation to others.)     

Let me quote my abandoned dissertation proposal by way of saying why I think substantive game theory is about the most important thing there is:

Central to the contractarian framework is a clear grasp of the interdependence of reasons for action in certain kinds of social settings. The idea of mutual advantage implies that we can often do better jointly than we can individually. There are gains to be had from cooperation.  However, as Hume put it, “the actions of each of us have a reference to those of the other, and are performed on the supposition that something is to be performed on the part of the other.”  It follows that the kinds of social cooperation we will be able to achieve and sustain depends on our expectations of the behavior of others. Our reasons to act to bring about the goods of cooperation, and to enter into agreements and comply with principles designed to facilitate them, therefore depend on the nature of the psychological capacities that enable agreement, assurance, and compliance. If we cannot sufficiently trust ourselves and others to keep agreements, or to adhere to conventions that are like agreements, or if we by nature severely discount future value, or are unwilling to tolerate more than a little risk, then we may find ourselves able to conceive of a social order that each of us would prefer, but which none of us may enjoy.   

15 thoughts on “Is Game Theory Worth a Damn?

  1. The criticism of game theory is nicely articulated by Ken Masugi to the following effect:

    Schelling’s critique of traditional economics does not go far enough. What about the character of the other persons we interact with? What if they are willing to send children into combat? What if they are willing to be suicide bombers? Game theory may well clear a cluttered mind, but it is no substitute for prudent judgment that examines the souls of ourselves and our enemies and what boundaries we set on our actions, if any.

    Michael Kinsley says that Schelling’s “Games and Strategy” was his favorite undergraduate lecture course. “[T]he world suddenly looked completely different.” Thucydides will do the same thing too, and leave you a wiser and not just a more clever man.

  2. Why do you suppose that Schelling’s course would not leave you wiser, as well as cleverer?

    Schelling has brought a kind of lucid rigor to thinking about profound issues like nuclear deterrence, punishment, our relationships at the end of life, global warming, segregation, and more. If you actually read Schelling, it is awfully difficult to not admire his combination of analytic acuity and humane sensitivy as “wise.”

  3. Game theory is part-n-parcel of the movement of modernity in which the scientific language of “causes” (as in the “root causes of crime”) gradually replaces the language of responsibility. Which is to say, it’s no accident that people — particularly contemporary politicians — seek out, say, “causes” of crime as a way to avoid the sin of appearing “judgmental.” The achilles heal of modernity: it wants to deliver people in power from the vexing discipline of giving moral justifications for their acts.

    A wise person can (if he has a high endowment of intelligence) use game theory well; and put it to good use. He becomes proficient in a rigorous skill, techne. But it hardly strikes me that a person becomes wise from learning game theory.

  4. Robert, There’s just no conflict between game theory & the ascription of responsibility. The point is just that in social settings, what it is to prudent to do depends on what others will do, and vice versa It strikes me that the phronimos will be be highly refined in his ability to think through strategy in interdependent context.

  5. Will: I agree with you — I don’t think there’s a conflict between them; there certainly isn’t a conflict that is necessary. Rather, I’m pointing out the basic, overall trend: the move to reliance on defining/rooting out problems (i.e. “social problems”) at their “root causes”; doing this to the neglect of giving rigorous account of one’s reason for moral ascriptions. But I don’t see why they can’t be mutually reinforcing– and so, again, I agree with you.

    However, there’s a decided fall-off in modernity from making moral arguments ascribing real praise & blame (really, the latter). Morality becomes something utterly and thoroughly personal and private. Concomitant with such phenomenon — as Tocqueville wisely foresaw — is the utter aggrandizement of government. Moral questions cease to be political questions about which there is truly robust debate; instead everything becomes gradually about “process”; ends essentially collapse into being means. You end up with very unpolitical politics.

    Granted, game theory doesn’t have much to do with defining causes. But the method *itself* doesn’t seem to tell us what *ends* are worthy–what noble, what base. Unless I’m mistaken. And I own that I possibly am in this regard.

  6. I liked the game theory in the Revolver. Of course it’s just a fiction but it’s rather simple for general understanding. And I’m sure they’ve worked on it a lot.

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  8. The criticism of game theory is nicely articulated by Ken Masugi to the following effect:

    Schelling’s critique of traditional economics does not go far enough. What about the character of the other persons we interact with? What if they are willing to send children into combat? What if they are willing to be suicide bombers? Game theory may well clear a cluttered mind, but it is no substitute for prudent judgment that examines the souls of ourselves and our enemies and what boundaries we set on our actions, if any.

    Michael Kinsley says that Schelling’s “Games and Strategy” was his favorite undergraduate lecture course. “[T]he world suddenly looked completely different.” Thucydides will do the same thing too, and leave you a wiser and not just a more clever man.

  9. Why do you suppose that Schelling’s course would not leave you wiser, as well as cleverer?

    Schelling has brought a kind of lucid rigor to thinking about profound issues like nuclear deterrence, punishment, our relationships at the end of life, global warming, segregation, and more. If you actually read Schelling, it is awfully difficult to not admire his combination of analytic acuity and humane sensitivy as “wise.”

  10. Game theory is part-n-parcel of the movement of modernity in which the scientific language of “causes” (as in the “root causes of crime”) gradually replaces the language of responsibility. Which is to say, it’s no accident that people — particularly contemporary politicians — seek out, say, “causes” of crime as a way to avoid the sin of appearing “judgmental.” The achilles heal of modernity: it wants to deliver people in power from the vexing discipline of giving moral justifications for their acts.

    A wise person can (if he has a high endowment of intelligence) use game theory well; and put it to good use. He becomes proficient in a rigorous skill, techne. But it hardly strikes me that a person becomes wise from learning game theory.

  11. Robert, There’s just no conflict between game theory & the ascription of responsibility. The point is just that in social settings, what it is to prudent to do depends on what others will do, and vice versa It strikes me that the phronimos will be be highly refined in his ability to think through strategy in interdependent context.

  12. Will: I agree with you — I don’t think there’s a conflict between them; there certainly isn’t a conflict that is necessary. Rather, I’m pointing out the basic, overall trend: the move to reliance on defining/rooting out problems (i.e. “social problems”) at their “root causes”; doing this to the neglect of giving rigorous account of one’s reason for moral ascriptions. But I don’t see why they can’t be mutually reinforcing– and so, again, I agree with you.

    However, there’s a decided fall-off in modernity from making moral arguments ascribing real praise & blame (really, the latter). Morality becomes something utterly and thoroughly personal and private. Concomitant with such phenomenon — as Tocqueville wisely foresaw — is the utter aggrandizement of government. Moral questions cease to be political questions about which there is truly robust debate; instead everything becomes gradually about “process”; ends essentially collapse into being means. You end up with very unpolitical politics.

    Granted, game theory doesn’t have much to do with defining causes. But the method *itself* doesn’t seem to tell us what *ends* are worthy–what noble, what base. Unless I’m mistaken. And I own that I possibly am in this regard.

  13. I liked the game theory in the Revolver. Of course it’s just a fiction but it’s rather simple for general understanding. And I’m sure they’ve worked on it a lot.