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Game Theory and Objectivism

Game Theory and Objectivism

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January 25, 2011

Question: The recent release of the movie A Beautiful Mind raises some questions regarding the efficacy of the work done by Nobel laureates John F. Nash, John C. Harsanyi, and Reinhard Selten. Their work involved the analysis of equilibria in the theory of non-cooperative games. Do you know of any written analysis of this work from an Objectivist perspective?

Answer: As such, Nash's contributions to non-cooperative game theory were a major breakthrough in the formal analysis of strategic interaction. Any interaction among individuals is fundamentally "non-cooperative," because each person's interests are distinct and each person decides as an individual. Even cooperation is "non-cooperative" in this sense. Nash's equilibrium concept, which is essentially that if one seeks to maximize one's benefit one should choose based on how one expects other parties to react, is valid in its field.

Certain conclusions from simplified game models, of which the most notorious has been the "prisoner's dilemma" one-shot game, have been abused by social philosophers and political scientists to advocate collectivism of various stripes. But a game is only as good as the model it represents, and Nash's work is not at fault for providing the tool that has been abused.