The Theory of Games
This chapter will study the theory of games (or game theory for short), which allows us to catalog many of those outcomes and to discuss both their positive and their normative aspects.
Abstract
If you had to be a pig, would you rather be a strong pig or a weak pig? Sometimes it pays to be weak. The biologist John Maynard Smith reports an experiment where two pigs are kept in a box with a lever at one end and a food dispenser at the other. When the lever is pushed, food appears at the dispenser. If the weak pig pushes the lever, the strong pig waits by the dispenser and eats all the food. Even if the weak pig races to the dispenser and arrives before the food is gone, the strong pig pushes the weak pig away. The weak pig is smart enough to figure this out, so it never bothers pressing the lever in the first place. On the other hand, if the strong pig pushes the lever, the weak pig waits by the dispenser and gets most of the food. But the strong pig can race to the dispenser and shove the weak pig aside before it has entirely finished eating and then help itself to the leftovers. This makes it worthwhile for the strong pig to push the lever. The outcome is that the strong pig does all of the work, and the weak pig does most of the eating. Strategic situations can yield surprising outcomes. The Prisoner’s Dilemma of Chapter 11 provides one example; the pigs in a box provide another. In this chapter, we will study the theory of games (or game theory for short), which allows us to catalog many of those outcomes and to discuss both their positive and their normative aspects.