Playing with Humanity through Game Theory

Professor of nuclear strategy, arms control, national security, foreign affairs, and Nobel laureate Thomas Schelling, was jointly awarded the prize for Economic Sciences in 2005 for "having enhanced our understanding of conflict and cooperation through game-theory analysis"

In Schelling's book 'The Strategy of Conflict' a mathematical theory, Schelling's Reorientation of Game Theory, outlines what would be a theorized mutually advantageous exchange in which each side would ultimately seek self-preservation.

Michael Kinsley, Washington Post Op Ed Columnist and former student of Schelling's, summarizes the professor's Reorientation of Game Theory as follows:

"[Y]ou're standing at the edge of a cliff, chained by the ankle to someone else. You'll be released, and one of you will get a large prize, as soon as the other gives in. How do you persuade the other guy to give in, when the only method at your disposal -- threatening to push him off the cliff -- would doom you both?"

"Answer: You start dancing, closer and closer to the edge. That way, you don't have to convince him that you would do something totally irrational: plunge him and yourself off the cliff. You just have to convince him that you are prepared to take a higher risk than he is of accidentally falling off the cliff. If you can do that, you win."

Winning requires the use of what are termed focal points, also called Schelling points, which I like to think of as societal norms that are easily understood. For instance, when riding a bicycle it is found to be more dangerous to make eye contact with oncoming bicyclists and in absence of eye contact the riders will naturally swerve to the direction of their societal norm.

The following excerpt captures the concept and illustrates how dangerous this approach can be: "focal points are dependent on culture. While avoiding eye contact gets to the “swerve right” equilibrium for Americans, it fails for many international students who drive on the left side of the road, and have the instinct to “swerve left.”

Then, there is another twist. Some students aren’t playing the game of coordination. They view the interaction more like a game of chicken. These people will never swerve because they don’t want to slow down and often they enjoy the opportunity to yell at others."

Beside the, um, ethical implications behind "winning", how can we be sure all players are playing the same game?