The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences

By Herbert Gintis | Go to book overview

10
The Analytics of Human Sociality

The whole earth had one language. Men said, “Come, let us build
ourselves a city, and a tower with its top in the heavens.” The
Lord said, “Behold, they are one people, and they have all one
language. Nothing will now be impossible for them. Let us go
down and confuse their language.” The Lord scattered them over
the face of the earth, and they ceased building the city.

Genesis 11:1

An economic transaction is a solved political problem. Economics
has gained the title of Queen of the Social Sciences by choosing
solved political problems as its domain.

Abba Lerner


10.1 Explaining Cooperation: An Overview

It is often said that sociology deals with cooperation and economics deals with competition. Game theory, however, shows that cooperation and competition are neither distinct nor antithetical. Cooperation involves aligning the beliefs and incentives of agents with distinct interests, competition among groups requires cooperation within these groups, and competition among individuals may be mutually beneficial.

A major goal of economic theory is to show the plausibility of wide-scale cooperation among self-regarding individuals. In an earlier period, this endeavor centered on the Walrasian model of general market equilibrium, culminating in the celebrated fundamental theorem of welfare economics (Arrow and Debreu 1954; Debreu 1959; Arrow and Hahn 1971). However, the theorem's key assumption that market exchange can be enforced at zero cost to the exchanging parties is often violated (Arrow 1971; Bowles and Gintis 1993; Gintis 2002; Bowles 2004).

The game theory revolution replaced reliance on exogenous enforcement with repeated game models in which punishment of defectors by cooperators secures cooperation among self-regarding individuals. Indeed, when a game G is repeated an indefinite number of times by the same players, many of the anomalies associated with finitely repeated games (4.11, §5.1,

-181-

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The Bounds of Reason: Game Theory and the Unification of the Behavioral Sciences
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Preface xiii
  • 1: Decision Theory and Human Behavior 1
  • 2: Game Theory: Basic Concepts 30
  • 3: Game Theory and Human Behavior 45
  • 4: Rationalizability and Common Knowledge of Rationality 83
  • 5: Extensive Form Rationalizability 102
  • 6: The Mixing Problem 121
  • 7: Bayesian Rationality and Social Epistemology 132
  • 8: Common Knowledge and Nash Equilibrium 146
  • 9: Reflective Reason and Equilibrium Refinements 164
  • 10: The Analytics of Human Sociality 181
  • 11: The Evolution of Property Rights 201
  • 12: The Unification of the Behavioral Sciences 221
  • 13: Summary 248
  • 14: Table of Symbols 250
  • Symbols for Chapter 11 251
  • References 253
  • Index 283
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