Game Theory: A Critical Introduction

By Shaun P. Hargreaves Heap; Yanis Varoufakis | Go to book overview
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Evolutionary game theory is central to a number of themes of this book. Firstly it addresses our concerns over the rationality and common knowledge of rationality (CKR) assumptions used by mainstream game theory. It does this by introducing a more modest assumption that has people adjusting their behaviour on a trial and error basis towards the action which yields the highest pay-off. Many find this more plausible than the pyrotechnics which conventional game theory often seems to demand from its agents under the guise of ‘being rational’ (see the discussion of CKR and CAB in Chapter 2). Secondly it potentially helps with the problem of equilibrium selection (which, as we have seen, has come to haunt the mainstream) by offering an account of the origin of conventions. Finally, the insights of evolutionary game theory are crucial material for many political and philosophical debates, especially those around the State.

To appreciate this last contribution, recall where we left the discussion of collective action agencies like the State in section 6.4. The argument for such an agency turns on the general problem of equilibrium selection and on the particular difficulty of overcoming the prisoners’ dilemma. When there are multiple equilibria, the State can, through suitable action on its own part, guide the outcomes towards one equilibrium rather than another. Thus the problem of equilibrium selection is solved by bringing it within the ambit of conscious political decision making. Likewise, with the prisoners’ dilemma/ free rider problem, the State can provide the services of enforcement. Alternatively when the game is repeated sufficiently and the issue again becomes one of equilibrium selection, then the State can guide the outcomes towards the cooperative Nash equilibrium.

This argument for a collective action agency is contested by the ideas of what Anderson (1992) calls the ‘intransigent Right’. These ideas are closely associated with a quartet of 20th century thinkers, Strauss, Schmitt, Oakeshott and Hayek, and they plausibly now shape ‘a large part of the


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Game Theory: A Critical Introduction


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