Rock, Paper, Scissors: Game Theory in Everyday Life

Len Fisher, an award-winning author of popular science books, has written an entertaining, enlightening and practical guide to the abstruse discipline of game theory. Fisher shows how game theory explains phenomena as mundane as why spoons go missing from a coffee break room, as ingenious as rabbinical problem solving in the Talmud and as fateful as global warming. getAbstract finds that his lively writing invites a wide audience. Fisher engages lay readers by elucidating an intensively mathematical subject without heavy reliance on equations or jargon. His treatment of the subject makes game theory appear only slightly more complicated than child's play. In fact, he often uses children's games to illustrate the role of game theory in daily life.

A good example of how to write at the "popular" end of the popular science spectrum. Game theory in general deals with settings in which each player has to choose one of several strategies without knowing other players' choices, and gets a payoff depending on everyone's choices (note this is rather different from what we call games in everyday language). Such games typically have a Nash equilibrium, which (roughly speaking) is the result when players behave selfishly; but there may be some different "cooperative" choices of strategies that would make everyone better off (a "social optimum"). This paradox or "logical trap" is usually illustrated by the Prisoner's Dilemma story. Observing where this situation occurs and contemplating ways of getting around them by "self-enforcing strategies" -- how cooperation might be achieved in the face of temptations to cheat -- are the main themes of the book, which is well paced and engagingly easy to read. Some highlights are (1) Discussion of "7 deadly dilemmas" given cute names by theorists (Prisoner's Dilemma; Tragedy of the Commons; Free Rider; Chicken; Volunteer's Dilemma; Battle of the Sexes; Stag Hunt) -- models in which there is math theory. (2) A lengthy verbal discussion of strategies to promote trust and cooperation (e.g. making it costly to change your mind later; deliberately cutting off your escape routes). (3) Martin Nowak's 5 rules for the social evolution of cooperation. While the in-text accounts of scientific studies in the human social world or in biology are conversationally casual, the end-notes (comprising 1/5 of the book) provide citations to the scientific literature -- a definite improvement on most books at this level. All popularizers tend to exaggerate the scope of applicability of their subject, but this book less so than most. Let me just mention two ways in which the real world is more complicated than the book implies. (4) Except in special cases where the payoff is money and nothing else matters, the payoff has to be modeled as some number of abstract "points" (or "utils", in jargon) which one can't actually measure. And then any observed behavior can be construed as optimal behavior in some game theoretic model. So game theory is more like a useful way of thinking about issues, and less like a traditional scientific theory which makes testable predictions (5) In complicated real world economic situations, trying to make everyone better off is both fiendishly complicated and involves some kind of tax and subsidy scheme; introducing such things creates its own moral hazard outside the context of the one particular game.

Faced with trillion-dollar bailouts, unending warfare and intractable terrorism, it's an awfully good idea to take a step back once in a while to ask why we do what we do. A spate of recent books -- such as Farhad Manjoo's "True Enough" -- has made the point that the human mind relies on shortcuts and estimation rather than cold rationality to make decisions. Author Len Fisher uses advances in game theory to takes us on a tour of the seven deadly traps that human beings fall into when they act solely in their self interest. Take the "Tragedy of the Commons." A balanced and harmonious sheep grazing operation can bring ruin to all its participants when each adds an "insignificant" extra sheep to their herds. Moving from a situation in which all benefit to one in which all lose everything may seems silly on paper. But consider what we are seeing as China and India attempt to industrialize. They see the US as hypocritical for asking them to limit their carbon emissions. But if they "get theirs," like we got ours, every nation on the planet will suffer climate change. Lest we despair, Fisher provides a survey of the solutions that can help us stay clear of the traps. When divvying up a resource, the "you cut and I choose" method helps ensure fairness. It's also often possible to divide a resource (say a piece of cake) so that each participants gets 100% of what they want (say the icing or the cake) rather than half. Fisher also discusses ways to quantify even the most abstract and qualitative goods. If a teenager who ordinarily pays $10 for a t-shirt is suddenly willing to pay $15 for one with a band or sports logo, the price differential of $5 is the shirt's cachet value. Even virtues can be quantified. Fisher uses the concept of amorphous "utils" to calculate the value of politeness, for instance. Given the choice of a small and large piece of cake, those who choose the small piece (because it's more polite to do so) can be said to have altered the relative value of the cake slices by adding more "utils" of politeness to the smaller piece. A person who chooses a 4-util small slice that comes with 8 utils of politeness (total 12 utils) over a 5-util slice of cake that comes with only 4 utils of politeness (total 9 utils) cn be aid to have have made a rational and self-interested choice. Once introduced to the concept, you see it everywhere -- from the thrifty grandmother telling a tot that a desired toy is really "junk" (giving it negative "worthiness" points) to a pastor advising his flock that charity that will build wealth in heaven. "Rock, Paper, Scissors" was a fun and breezy read, math free and mostly easy to understand. Enjoyable and mind-opening!

Game theory is one of the most useful tookits we have, a juncture where mathematics, economics and behavorial science meet. Fisher's book tells you what you need to know and how to use it Written in his witty, articulate prose, it is a fun and compeling read. Do not let that fool you: this is serious science, and a serious book. On a personal level, game theory can help sibling rivalry, divorce, contract disputes, and getting out of a bar fight in one piece. On larger scales, it can help us all share a fairer world: a more fair allocation of resources getting scarcer all the time, attempts to control nuclear weapons, and, yes, global warming. The best science book of the last two years.

Having just picked up this book as a game theory practitioner, I found this to be an excellent read. My work which centers primarily around the work of Thomas Schelling has led me to a variety of books on the game theory topic. Even Dr. Schelling, who has a comfortable writing style, evokes examples beyond the "everyday" realm, applicable to political and global challenges, more frequently than the cocktail parties and family life. I found this book ties together the work of many of the top thinkers in the field, including recent Nobel Prize winners, taking a breadth rather than depth approach and at the same time provides the accessibility and application to experiences in everyday life. The few diagrams, and limited "math" will lower the barrier that other fine writers have created in their coverage of the topic. This is not to say it is "dumbed down". Quite the contrary, it is put in an everyday perspective and therefore worthy of consumption by a wider audience. For further information, and for delving more formally into the topic, an extensive bibliography is provided, itself about 20% of the book. For the person interested in looking beyond this books level, there are many references to research. All in all I think it fills a specific gap existing in connecting this important topic to our everyday lives. This topic, which explains so much about our relationships, how we do cooperate, and frequently don't , is worth a good read.