No One Makes You Shop at Wal-Mart by Tom Slee

Author:Tom Slee
Language: eng
Format: mobi, epub
Publisher: Between the Lines
Published: 2006-08-18T04:00:00+00:00

Game Theory: What Is It Good For?

Multiple equilibria are the rule rather than the exception in game theory. Even simple games can have an infinite number of equilibria, and this oversupply of solutions is the source of some problems for the theory. In cases in which there is no obvious focal point outside the game that allows co-ordination, game theoretical problems can become intractable; theorists will have difficulty predicting the outcome of a particular situation.

Game theory has a mixed reputation within economics and political science because of this intractability. While many people in those fields recognize that it contains at its core a more realistic description of many situations than do models built on independent actions, others suggest that such a description is not of much use if it is too complex and intricate to make concrete predictions. The complexities of even as simple a place as Whimsley are such that prescriptions should be made very cautiously, and the real world is more complicated than Whimsley.

Economist and free-market enthusiast David Friedman offers a cautionary view of game theory and its applications:

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