Normative and Descriptive Game Theory

This article introduces a strategic decision-game theoretic approach, the Pardoner’s Dilemma, and juxtaposes it with the Prisoner’s Dilemma. Game theory has emerged as a significant approach in the twentieth century for explaining strategic decision-making in numerous arenas, including economics, business, politics, ethics, international relations, biology, law, and war studies. ‘Game theory’ explains how and why players/actors/agents cooperate or conflict to procure their self-interests in a social world. Life is a game, and human, corporate, and artificial intelligent agents are players who (...) play different games to maximise utility or minimise disutility. The Prisoner’s Dilemma is a promising game-theoretic approach that explains strategic decision-making in zero-sum and non-zero-sum games. ‘Strategic decision-making’ means that the outcome does not depend upon the actions of a player but upon all players. There are numerous essential game strategies, including tossing, negotiation, bargaining, balloting, competition, chance, power, and arbitration. Although the Prisoner’s Dilemma is a good game-theoretic approach, it does not allow players to use the key game strategies. In contrast, Pardoner’s Dilemma is a game theoretic approach that not only explains zero-sum and non-zero-sum games but also allows the players to use different game strategies, such as negotiation, bargaining, tossing, chance, balloting, competition, arbitration, and power. The article develops and defends the Pardoner’s Dilemma in the game-theoretic approach as an alternative to the Prisoner’s Dilemma. The article claims that the Pardoner’s Dilemma is a more promising approach than the Prisoner’s Dilemma in the decision-game theoretic framework. By introducing the Pardoner’s Dilemma, the article enhances the scope of decision/game theory in social sciences. (shrink)

The paper has a twofold aim. On the one hand, it provides what appears to be the first game-theoretic modeling of Napoleon’s last campaign, which ended dramatically on 18 June 1815 at Waterloo. It is specifically concerned with the decision Napoleon made on 17 June 1815 to detach part of his army against the Prussians he had defeated, though not destroyed, on 16 June at Ligny. Military historians agree that this decision was crucial but disagree about whether it was rational. (...) Hypothesizing a zero-sum game between Napoleon and Blücher, and computing its solution, we show that it could have been a cautious strategy on the former's part to divide his army, a conclusion which runs counter to the charges of misjudgement commonly heard since Clausewitz. On the other hand, the paper addresses methodological issues. We defend its case study against the objections of irrelevance that have been raised elsewhere against “analytic narratives”, and conclude that military campaigns provide an opportunity for successful application of the formal theories of rational choice. Generalizing the argument, we finally investigate the conflict between narrative accounts – the historians' standard mode of expression – and mathematical modeling. (shrink)

Games have a complex, and seemingly paradoxical structure: they are both competitive and cooperative, and the competitive element is required for the cooperative element to work out. They are mechanisms for transforming competition into cooperation. Several contemporary philosophers of sport have located the primary mechanism of conversion in the mental attitudes of the players. I argue that these views cannot capture the phenomenological complexity of game-play, nor the difficulty and moral complexity of achieving cooperation through game-play. In this paper, I (...) present a different account of the relationship between competition and cooperation. My view is a distributed view of the conversion: success depends on a large number of features. First, the players must achieve the right motivational state: playing for the sake of the struggle, rather than to win. Second, successful transformation depends on a large number of extra-mental features, including good game design, and social and institutional features. (shrink)

When an agent’s motivation is sensitive to how his supervisor thinks about the agent’s competence, the supervisor has to take into account both informational and expressive contents of her message to the agent. This paper shows that the supervisor can credibly express her trust in the agent’s ability only by being un- clear about what to do. Suggesting what to do, i.e., “directives,” could reveal the supervisor’s “distrust” and reduce the agent’s equilibrium effort level even though it provides useful information (...) about the decision environment. There is also an equilibrium in which directives are neutral in expressive content. However, it is shown that neologism proofness favors equilibria in which directives are double- edged swords. (shrink)

The chapter reviews recent theoretical and empirical developments concerning the theory of team reasoning in game theoretic interactions.

Universal social institutions, such as marriage, commons management and property, have emerged independently in radically different cultures. This requires explanation. As Boyer and Petersen point out ‘in a purely localist framework would have to constitute massively improbable coincidences’ . According to Boyer and Petersen, those institutions emerged naturally out of genetically wired behavioural dispositions, such as marriage out of mating strategies and borders out of territorial behaviour. While I agree with Boyer and Petersen that ‘unnatural’ institutions cannot thrive, this one-sided (...) explanation of universal social institutions in terms of genetic human nature is unsatisfactory. Drawing on the literature on multi-level selection and gene-culture coevolution, I argue that universal social institutions are first and foremost the products of cultural selection. They occupy fitness peaks in the landscape of cultural possibilities, much in the same way that biological adaptations occupy fitness peaks in the landscape of biological possibilities. To show this, I use game-theory. By modelling the domains of social interaction in which marriage, commons management, and property emerged as Prisoner’s dilemma situations, it becomes clear how an institutional framework allows the group to move to an interactive equilibrium with a larger payoff. Institutions do so by incentivising all parties to adopt a cooperative strategy. They are culturally selected ways of optimising genetically constrained domains of human social interaction. (shrink)

Standard models in epistemic game theory make strong assumptions about agents’ knowledge of their own beliefs. Agents are typically assumed to be introspectively omniscient: if an agent believes an event with probability p, she is certain that she believes it with probability p. This paper investigates the extent to which this assumption can be relaxed while preserving some standard epistemic results. Geanakoplos (1989) claims to provide an Agreement Theorem using the “truth” axiom, together with the property of balancedness, a significant (...) relaxation of introspective omniscience. I provide an example which shows that Geanakoplos’s statement is incorrect. I then introduce a new property, local balancedness, which allows us both to correct Geanakoplos’s result, and to extend it to cases where the truth axiom may fail. I exploit this general Agreement Theorem to provide novel epistemic conditions for correlated and Nash equilibrium, both of which relax the assumption of introspective omniscience. In all three cases, the results are also extended to infinite state spaces. (This is Chapter 5 of my 2014 Oxford DPhil (PhD) thesis.). (shrink)

In recent years, the human ability to reasoning about mental states of others in order to explain and predict their behavior has come to be a highly active area of research. Researchers from a wide range of fields { from biology and psychology through linguistics to game theory and logic{ contribute new ideas and results. This interdisciplinary workshop, collocated with the Thirteenth International Conference on Theoretical Aspects of Rationality and Knowledge (TARK XIII), aims to shed light on models of social (...) reasoning that take into account realistic resource bounds. People reason about other people's mental states in order to understand and predict the others' behavior. This capability to reason about others' knowledge, beliefs and intentions is often referred to as theory of mind. Idealized rational agents are capable of recursion in their social reasoning, and can reason about phenomena like common knowledge. Such idealized social reasoning has been modeled by modal logics such as epistemic logic and BDI (belief, desire, intention) logics and by epistemic game theory. However, in real-world situations, many people seem to lose track of such recursive social reasoning after only a few levels. The workshop provides a forum for researchers that attempt to analyze, understand and model how resource-bounded agents reason about other minds. (shrink)

The game theoretic notion of best-response reasoning is sometimes criticized when its application produces multiple solutions of games, some of which seem less compelling than others. The recent development of the theory of team reasoning addresses this by suggesting that interacting players in games may sometimes reason as members of a team – a group of individuals who act together in the attainment of some common goal. A number of properties have been suggested for team-reasoning decision-makers’ goals to satisfy, but (...) a few formal representations have been discussed. In this paper we suggest a possible representation of these goals based on the notion of mutual advantage. We propose a method for measuring extents of individual and mutual advantage to the interacting decision-makers, and define team interests as the attainment of outcomes associated with maximum mutual advantage in the games they play. (shrink)