Thursday, November 18, 2004


Life in a game theory setting

More to come about my current research on media politics and game theory economics. First a few examples why economic models can tell us so much more about life itself. Yes, many years have passed since Gary Becker astonished the world with his economic theory on family-planning. But we still find new ways of using game theory to organise our knowledge about human interactions.

Interesting empirical study: Game theory can, in fact, explain why men and women are different - or, rather how men and women really act very similar, given their respective institutional restraints. I am looking forward to professor Gordon Tullock's upcoming book on the subject of human sexual behavior. In the meantime - if you haven't done so already - please read these two very popular books on the subject: Steven Pinker's How the Mind Works and David Barash and Judith Lipton's very insightful Myth of Monogamy. (In this genre, I would also recommend The Selfish Gene by Richard Dawkins.)

How to model the issue:
(I know that my Swedish colleague Peter Santesson-Wilson has some strong opinions on Pinker's work. I wonder what he would say about this, well, here it goes... my way) I would advocate Darwinian Politics by Paul H. Rubin as a good starting point of how to explain the differences in "The Battle of the Sexes". However - and this is important - people do not make choices based on marginal utility alone - and maybe Lipton's and Barash's conclusions rather should be discussed from a security-setting game model where the payoff for every individual is less important than the very signal of belonging in a community. Clearly, it seems too hasty an argument to say that studies like these can be discussed only in terms of marginal utility principles or the difference in viable micro-macro strategies. (In fact, this is probably better described as a coordination game with pending (and hidden) interest rates.)
To the individual, to leave the tribe is more dangerous than any outcomes within the community which is why the normal pareto-optimal actors would like the signalling game to be recognized. On the other hand - those who would be really interested in the marginal utility are the ones who act like extreme optimists. As interesting as they may be to study, they may cause some scientists to overlook the power of institutions.

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