Game Theory

Political Science Entertainment Night

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Tonight, a few of us are going to gather to participate in a movie and game night.  The goal of which is to be entertained by both while also having it relate to what we study in political science. Tonight's Agenda: The movie for tonight is the classic The Princess Bride. The inspiration for having … Read more

Ferengi Rules of Acquisition

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Some musings and reflections upon Star Trek (The Next Generation and a few of its successors for those keeping score), reminded me that the Ferengi had an extensive list of economic rules.  The characters, from my recollection, were portrayed as a race of uber-capitalists who would exploit for the sake of profit at every turn.  … Read more

Dinosaur Comics and the Ultimatum Game

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While Dinosaur Comics tends to touch on relevant political and philosophical issues, this intersection between game theory and experimental economics was worth reposting: It also gave me the opportunity to drop a line to Ryan North and recommend the Heller and Sieberg article on the FU Factor. Michael A. AllenMichael A. Allen is an Associate … Read more

Pirates, the Dark Knight, and more Game Theory

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Presh Talwalkar at Mind Your Decisions has posted a decent piece on another game theoretic situation from the opening scene in the Dark Knight (contains mild spoilers): The original plan of equal division is flawed. Each robber has incentive to increase his share by killing a fellow team member. Once a member performs his job, he loses … Read more

The Dark Knight and Game Theory

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If you have not already seen The Dark Knight, then you should read this post at a later time as to avoid spoilers after the jump.  Otherwise, follow the jump for a game theoretic discussion derived from the movie that has already broken two box office records for both best midnight opening and top first day revenue.  I personally enjoyed the movie immensely, but that discussion does not follow.

So, officially, consider this a spoiler alert for what follows.

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The Unbearable Lightness of Game Theory?

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OrgTheory.net has a great post today assessing the merits of game theory.  The author makes some excellent points.  In particular, he points out that some of the more interesting outcomes we see in the social sciences are off-equilibrium–inherently, then, these are the ones that we can’t explain with game theory.  Additionally, and more generally as a criticism of rational choice, individuals don’t necessarily make decisions that conform to what we typically think of as the rules that describe rational actors.

Check out the post at OrgTheory.net, and the preceding entry by the same blogger (Michael McBride) about game theory’s potentially misleading name, and meet me back here after the jump.

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A cup of coffee, a blow up doll, and some functionally unpleasant commuters

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Die hard rational choice social scientists are often puzzled when they see people making less than optimal decisions. For example, it is hard to explain why people choose to pay the cost of punishment and make themselves worse off just so that they can punish someone who acted unfair or against the rules. I came across an example of this in yesterday’s Washington Post when a reporter published a story about a little known short cut near the Dulles Airport. According to the reporter, drivers normally sit in traffic, moving slowly, on a toll road as they drove passed the airport, but they could avoid the traffic and save time and money by taking the public access road through the airport. The only problem is that the public access road is only meant for airport traffic. It is against the “rules” to drive on it unless you are utilizing the airport’s services or are have a passenger with you during rush hour. People have found creative ways around these rules, like buying a cup of coffee from the sole gas station in the airport or driving with a blow up doll in the passenger seat. However, these methods are not exactly seen as legitimate ways to get around the rules. The "right" thing to do is to stay on the toll road and not cut through unfairly through the airport road.

More after the jump….

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Prisoner’s Dilemma Answers

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I posted previously that Freakonomics was hosting a Prisoner’s Dilemma contest.  About a week ago they selected the top five answers and had a quick voting contest (comment democracy with 48 hours to decide the winner).  Since I am both currently attending one of the EITM summer programs and exercising my current mathematical knowledge by attempting to run a maximum likelihood estimation of a generalized Prisoner’s Dilemma model with a normally distributed cost function to the players for cooperation; it seemed like a good time to return to the post and evaluate the answers provided.

Adding a pre-game to the Prisoner’s Dilemma ought not to change the strategy of either player.  In theory, if you are asking your potential opponent/partner a question, you want to select someone who is going to play sub-optimally by either their own ignorance or your ability to convey to them that you are willing to cooperate (but will not anyways).  A rational interviewee will see this, and will either defect no matter what to dissuade you from picking them or attempt to coax the main player into cooperation only willing to defect later.  When evaluating any question you are asking another person a question in a non-cooperative framework, you must ascribe the same level of rationality that they will have in playing the game.  That is, if you believe people to remain rational actors, then talk prior to the game can remain cheap as a single question may not return an honest answer.

After the jump I discuss the five questions and the usefulness of each:

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The Complexity of Fairy Cooperation

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Automated recommendation software can be a very efficient technique to increase revenues and doubly so in the world of click-to-purchase materials and low thresholds for impulsive purchases.  However, these algorithms can produce some hilarious results given enough interest.  For example, after the jump, see Amazon’s current match for Axelrod’s The Complexity of Cooperation.

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