For what it's worth, here's what one of last year's Nobel recipients said
about game theory in 1990:
Douglas North:
"Game theory highlights the problems of cooperation and explores specific
strategies that alter the payoffs to the players. But there is a vast gap
between the relatively clean, precise, and simple world of game theory and
the complex, imprecise, and fumbling way by which human beings have gone
about structuring human interaction. Moreover, game theoretic models, like
neoclassical models, assume wealth-maximizing players. But ... human behavior
is clearly more complicated than can be encompassed in such a simple
behavioral assumption. [G]ame theory ... does not provide us with a theory of
the underlying costs of transacting and how those costs are altered by
different institutional structures." (p. 15)
North, Institutions, Institutional Change, and Economic Performance, CUP,
1990.
I get the sense from a number of the posts on game theory that the history,
cultural setting, and institutional arrangements therefore power structures
are buried in the back of most mainstream game theoretic models. If
heterodox/radical game theory models don't need game theory to conduct their
analysis, as one correspondent claimed, then what's the value of game theory?
Does it just formalize institutional and power issues, making them appear
clearer cut than they really are? If criminals don't rat on one another in
the prisoner's dilemma because of "honor among thieves", is that the extent
to which institutional arrangements are modelled? What of the role of third
parties (eg the state or corporation) exercizing enforcement of various games
through sovereign power?
Apologies to those of you who get duplicates because I'm cross-posting.
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Brent McClintock | |
Economics | People have "a taste |
Carthage College | for effective work |
Kenosha, Wisconsin 53140 | and a distaste for |
USA | futile effort" |
Phone: (414) 551-5852 | |
Fax: (414) 551-6208 | Thorstein Veblen |
Internet: [EMAIL PROTECTED] | |
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