Re: Game theory saved the mainstream

[BILL MITCHELL <ECWFM@xxxxxxxxxxxxxxxxxxx>]

Doug asks:

>While we're at it, doesn't the "information assymmetry" stuff serve as a
>polite way for talking about power and conflict, without getting to messy?

and Eric (nicely) stated:

> It seems that no one has been able to back up the claim that game theory
> subverted mainstream economics.  Therefore, perhaps it is time to offer the
> opposite hypothesis.
>
> To wit, game theory SAVED mainstream economics.
>
saved does overstate the case!

I have read over the last fortnight lots about nobel prizes and this and
that about game theory. here is my very brief offering.

1) the nobel prize is merely another bourgeoise abberation - and the game
theorists who recently get their "honour" join a wonderful (g) group of
insightful, relevant and deep economists. given the previous honour roll, i
think it is very apt that game theory has now been placed among these
luminaries.

2) David Gordon (in poverty and underdevelopment - it was a heath:mass book in
the mid 70s) has a chapter on "response to anomaly" in the neoclassical
(mainstream) paradigm.

his point was that the essentials of mainstream analysis are simple - and
whenever it came up against an empirical anomaly (remembering the paradigm
tries to make itself useful by predicting events) it twists and turns and adds
some more special cases. gordon was demonstrating this in the human capital
literature where finally everything affected earnings and all were embraced in
a real income maximising neoc. model. in other words it can never be wrong and
the hard core nonsense evades detection for being spurious.

Sweezy (in essays on modern capitalism - a collection of
essays circa (?) 1980) also refers to the impoverished substance of orthodoxy
being accompanied by a profusion of "applications" and sophisticated and
technical analysis (sometimes unreadable to all but the most mathematical among
us).

examples abound, but i think straight away about becker and tulloch and that
lot who could find nothing better to do than calculate optimal whipping rates
for slaves and transformation ratios to allow us to go from kissing our
lover(s) to something more intense. widening applications.

and game theory (and information assymmetries and more and more ) are
in my view an example of widening the tools and making the
sophistication obscure the lack of content. Game theory is another
"what goes in, comes out." type of neoc. activity.

I am yet to see a really radical conclusion drawn from game theory,
which we were not able to work out with more transparent class and surplus
analysis.

give them a nobel prize - thats all it deserves!

Kind regards
bill
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