Re: Game theory pathologies

[Helen Tilley <helen_tilley@xxxxxxxxx>]

If anyone is interested in focussing on the institutional
side of game theory I can recommend the following:

Eggertsson, T;  (1990); Economic Behaviour and
Institutions. Cambridge University Press, UK.

Knight, J;  (1992);  Institutions and Social Conflict.
Cambridge University Press, UK.

Hargreaves Heap has written some good texts covering
different aspects of GT:

I have to include this book on rationality, being at the
root of the use of GT - Hargreaves Heap, S;   (1989);
Rationality in Economics. Basil Blackwell, UK.

Hargreaves Heap, S;  Hollis, M; Lyons, B; Sugden, R; Weale,
A;  (1992);  The Theory of Choice:  A Critical Guide.
Basil Blackwell, UK.

Hargreaves Heap, S;  Varoufakis, Y;  (1995);  Game Theory:
A Critical Introduction.  Routledge, UK.


While on the topic, I do have a gripe with the way in which
game theory is often referred to.   It explains the
institutional solution to the collective action problems of
free riding and distributive conflicts from the point where
the institutions or conventions were present, but fails to
adequately account for their emergence.  Some (for example
Axelrod, Hardin) have turned to social theory to explain
the emergence of institutions in collective action theory
and this permits the incorporation of other elements of
social behaviour such as pride and emotion which affect
economic desires.



--- "J. Barkley Rosser, Jr." <rosserjb@xxxxxxx> wrote:
>      Well, I don't think this is in either of these books
> and it is not made much of in the Mirowski book either,
> but can be found in the JEL review article by Mailath
> in 1998 on "Do People Play Nash Equilibrium?" or
> some title like that.
>      The problem raised by Mailath (actually by many, he
> is just reviewing and summarizing) is that in general
> in many game situations there are multiple equilibria,
> and LOTS of them.  So, "rational game theory," if that
> is what we mean by Nash equilibrium, does not really tell
> us what people will do, even if they are "rational."
> This
> is where recent developments like evolutionary game
> theory come in that supposedly provide mechanisms
> for how an equilibrium is to be selected.
>      Another major problem, discussed in Mirowski and
> evident from almost Day One, is the prisoner's dilemma,
> which was first labeled by Nash's major professor at
> Princeton, Al Tucker of the Kuhn-Tucker Theorem, although
> it was first formulated by Melvin Dresher and Merrill
> Flood,
> two mathematicians at the RAND Corporation (the role of
> the RAND Corporation in the development of economics
> in the second half of the 20th century is a major theme
> of
> his _Machine Dreams_).  Anyway, the Nash equilibrium
> for the one-shot prisoner's dilemma is to "confess" (not
> cooperate) as is widely known.  However, right up front
> Dresher and Flood conducted experiments on the prisoner's
> dilemma and found that participants cooperated more often
> than they "confessed."  Nash was quite upset about this
> result.
>       Of course there has been a lot of discussion of the
> prisoner's dilemma among political scientists as well as
> economists, with Robert Axelrod's _The Evolution of
> Cooperation_, 1984, providing a classic discussion.
> Barkley Rosser
> Editor, Journal of Economic Behavior and Organization
> James Madison University
> ----- Original Message -----
> From: "Tracy Lightcap" <tlightca@xxxxxxx>
> To: <pkt@xxxxxxxxxxxxxxxx>
> Sent: Tuesday, April 30, 2002 11:22 AM
> Subject: Game theory pathologies
>
>
> > Steven Block asked for a readable critical analysis of
> game theory based
> on
> > its applications. He should see:
> >
> > Donald Green and Ian Shapiro. 1994. Pathologies of
> rational choice theory.
> > New Haven: Yale
> >
> > Jeffrey Friedman, ed. 1996. The rational choice
> contorversy. New Haven:
> > Yale.
> >
> > Both have to do with with rational choice applications
> in political
> > science, thus covering slightly broader ground than
> game theory, but the
> > critique is sufficiently general to cover the bases.
> The present
> > disciplinary unrest in political science - yes, we have
> it too - is
> > directly connected to these books.
> >
> >
> > Tracy Lightcap
> > Associate Professor
> > Political Science
> > LaGrange College
> > LaGrange  GA  30240-2999
> > 760.880.8226  FAX 706.880.7040
> > tlightca@xxxxxxx
> >
>


=====
--------------------------
Helen Tilley
Economist
Policy Analysis Department
Ministry of Finance
Dar es Salaam
Tanzania

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