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Game Theory

Applications Of Game Theory



Lloyd Shapley and Shubik (1954), two Princeton contemporaries of Nash, began the application of game theory to political science, drawing on Shapley's 1953 publication to devise an index for voting power in a committee system. William Riker and his students at the University of Rochester took the lead in recasting political science in terms of strategic interaction of rational, self-interested players (see Riker and Ordeshook; Shubik, 1984; Riker in Weintraub), and there is now a specialized market for game-theory textbooks for political science students (Morrow). Donald Green and Ian Shapiro (1994) criticize recent applications to politics of game theory and related forms of rational-choice theory as viewing political behavior as too exclusively rational and self-interested to the exclusion of ideologies, values, and social norms (see Friedman for the ensuing controversy).



Recasting Marxism in terms of rational choice and analyzing class struggle as a strategic game is especially controversial (Carver and Thomas). Conflict and cooperation (whether in the form of coalitions or contracts) are at the heart of law, as of politics. Douglas Baird, Robert Gertner, and Randal Picker (1994), among others, treat such legal topics as tort, procedure, and contracts as examples of strategic interaction, as the growing sub-discipline of law and economics increasingly reasons in terms of game theory. As a counterpart at a more "macro" level to game-theoretic analysis of political and legal conflict and cooperation, Andrew Schotter (1981) and Shubik (1984) propose a "mathematical institutional economics" to explain the evolution of social institutions such as contract law, money, trust, and customs, norms, and conventions ("the rules of the game") as the outcome of strategic interaction by rational agents. This approach shows promise, but has been received skeptically by economists such as Ronald Coase who rely on less mathematical neoclassical techniques to develop a "New Institutional Economics," and with even less enthusiasm by economists outside the neoclassical mainstream, such as Philip Mirowski. Going beyond the explanation of merely mundane institutions, Steven Brams (1983) uses game theory to explore questions of theology.

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Science EncyclopediaScience & Philosophy: Formate to GastropodaGame Theory - The Origins Of Game Theory, Nash Equilibrium, The Nash Bargaining Solution, And The Shapley Value