Most people understand only two types of games. Games in which competition wins, and games in which cooperation wins.
The more gross games of life on the lower levels of Maslow's hierarchy are best played with the spirit of competition in which free markets do well. The subtle games of life on the higher levels of Maslow's hierarchy are best played with the spirit of love in which cooperation wins.
Communism is a game in which love is forced by the method of cooperative game theory. Capitalism is a game in which individuals are free to maximize their unidimensional utilities using non-cooperative game theory. Since love can never be forced, and unidimensional utilities are unreal, neither system has brought lasting peace and well-being to humankind.
But games don’t have to be divided only between cooperative and non-cooperative game theory models.
By allowing a multi-dimensional utility, such that one's utility is a positive function of another's utility, one can play a third type of self-cooperative game in which cooperation results endogenously even when individuals behave in rational self-interest. Economists don’t have a monopoly on the definition of “rational,” and their small-self attempts to define “rational” have kept them imprisoned in their prisoner’s dilemma games. The schizophrenic nature of the Nash equilibrium in a prisoner’s dilemma game is easily seen once humans embrace their big-self multidimensional utilities.
Self-cooperative games allow both love and freedom, as they use multidimensional utilities and are free of any force of coercion by the government agency. In these games one loves out of one's freedom, and feels free because one is loved.
The challenge for economists and politicians is to create conditions through human values-based education, elimination of poverty, etc., such that the self-cooperative games don't devolve into self-destructive games in which one's multidimensional utility is a negative function of another's utility.
The number of people playing self-destructive games has grown exponentially (e.g., terrorist groups, communal rioters, revengeful nationalistic citizens, etc.) over the past quarter century. Unless economists and politicans acknowledge the existence of multidimensional utilities in the real games played by human beings, they will fail in solving the problems of war and terrorism.
Only if we acknowledge that multidimensional utility functions exist, can we take appropriate actions to encourage such utilities to have positive weights for others' utilities? Creating conditions that influence multidimensional utility functions to have positive weights of others' utilities is needed as much as increases in the GDP. Unfortunately, economic and political thinkers remain obsessed only with the latter.
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2 comments:
Hi professor, I really like this post. Now, I understand what you're saying and I agree that we must realize that the world DOES contain multidimensional utilities wherein one human's happiness is in his fellow human's happiness. This interpretation of game theory is definitely better and its implications would be productive for man rather than the more recent destruction that previous understandings have led to.
Ikhlas,
Did you know that the father of Game Theory, John von Neumann, recommended to the US Presidents in 1940s and 50s, a preventive war with USSR, that would have destroyed that country using all our nuclear might. And this was not an odd voice in our govt. Many in the defense establishment were aware of such plans - one of which called for destruction of more than 20 cities in USSR. Mr. Neumann - thought by many as even smarter than his esteemed colleague at Princeton, Albert Einstein - came to this conclusion using his small-self game theory models using a unidimensional utility function that basically gave zero weight to the welfare of the citizens of USSR. As soon as you allow a multidimensional big-self utility function, all the mathematics recommending the annihilation of USSR falls apart. Mathematics and clever game theory models are subject to the limitations of their assumptions. If you feed in apathy for fellow human beings in these models, you will get disastrous results for humanity. In fact, we are witnessing the results of such a clever small-self game-theoretic foreign policy. The world is now full of small-selves playing self-destructive games. The same people could have been playing self-cooperating games, if we had more enlightened big-self foreign policies in United States, USSR, and other nations after the end of WW2.
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