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What is game theory?

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Kelvin Silva Posted: Sat, Sep 8 2012 2:04 AM

Does this type of theory make central planning more viable? Thats what ive been told. I dont know much about it, and i cannot really do any type of advanced mathematics.

Anyone have good videos on the basics?

I doubt it would be viable but could it be?

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Well, first of all,

http://en.wikipedia.org/wiki/Game_theory

It's basically a discipline that rests on the premise reiterated by the protagonist in the movie π...

"my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph the numbers of any system, patterns emerge. Therefore: There are patterns everywhere in nature."

You might say game theory is the application of these assumptions to human behavior.  The basic idea is that you can predict behavior through mathematical modeling.

This is how mathematicians become Nobel Laureates...they work on shit like this and win the economics prize.  You may remember John Nash, the main character in the book and film A Beautiful Mind (which won every major Oscar except for Best Actor because Russell Crowe is an asshole.)

Anyway, to answer your question, no, the idea that you can centrally plan an economy is still total horse shit.  Think about what you're being told...that it is literally possible to predict what human beings want, when, and what they will do.  And not only that, but you're going to know all this by doing some math problems.

I'd have an easier time believing it if your friend just told you he was psychic.

 

This is not to say game theory as a discipline is totally useless, it's just that your friend is basically saying "increasing the efficiency of clerical work through the use of computers is all we need to be able to handle the US national debt, and the $200 Trillion in unfunded liabilities.  Increased efficiency means lower costs." 

But below is a video where a simple example of game theory is applied to policy.  I've seen some critics of this claim he's not accurately representing the dilemma, but I think it's correct enough to at least give you a better idea of the kind of thing someone means when they use the term.

There's also a youtube channel pretty much solely dedicated to the subject:

JimBobJenkins

 

 

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I've heard that no one actually uses game theory to solve any real world problems. You learn it, then forget it.

Anyone know if this is true?

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RagnarD replied on Sat, Sep 8 2012 3:33 AM

The only contact I've had with game theory is in pointing out the fallacy in socialists arguements, that they view wealth as a zero sum game, i.e. one persons gain is anothers loss, therefore the rich getting richer means the poor get poorer.  While the reality is that competition and production make it a positive sum game, where the economic pie is enlarged by increased production, that wealth is obviously not a static quantity. 

 

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The only contact I've had with game theory is in pointing out the fallacy in socialists arguements,..

Did you see a formal mathematical proof of this?

I suspect that the terms zero sum game and positive sum game are merely borrowed from game theory, with other arguments used to point out the fallacy.

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cab21 replied on Sat, Sep 8 2012 3:55 AM

http://oyc.yale.edu/economics/econ-159

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RagnarD replied on Sat, Sep 8 2012 4:47 AM

Did you see a formal mathematical proof of this?

I suspect that the terms zero sum game and positive sum game are merely borrowed from game theory, with other arguments used to point out the fallacy.

No, as I remember it was just a theoretical arguement between a fixed pie (zero sum) and a growing pie (positive sum).  I'm pretty sure I've run across the arguement somewhere else as well, as I distinctly remember "positive sum" being used, which does not occur in this article, but here is the basic arguement  http://www.aynrand.org/site/PageServer?pagename=objectivism_buy_american

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Game theory is the study of strategic decision making. More formally, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.

It seems to me that for this game theory to work, all actors in the economy must act rationally.

That is with every decision they must choose the option with most cost/benefit ratio.

We know that is absurd, not everyone acts rationally in the economy; people want to buy more than they have, or less, or they want a useless luxury, or just something for fun; and how can anyone make every purchase and decision by weighing in on cost/benefit? Alot of emotion runs through our minds when we buy something.

Even when i myself go shopping i might buy too much food or too little food. Or the 'animal spirits' kick in and i buy a cake or an extra additional bottle of milk (low cost to benefit, no nutritional value, hurts my health, etc,etc).

As for the video; who is obama to say who is cheating and who is not? Is he the master punisher of all? What if this video was made from an iranian view point? The united states would be the aggressor in this case and iran would be the retaliator(mass sanctions) (iran cant retaliate against united states army). It seems as if this is more war propaganda (how is building a nuke cheating? all other surrounding countries have nukes too).

//offtopic-

Would this be a type of pragmatism?

Or am i getting the definition wrong?

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kelvin_silva:

Game theory is the study of strategic decision making. More formally, it is "the study of mathematical models of conflict and cooperation between intelligent rational decision-makers.

It seems to me that for this game theory to work, all actors in the economy must act rationally.

That is with every decision they must choose the option with most cost/benefit ratio.

We know that is absurd, not everyone acts rationally in the economy; people want to buy more than they have, or less, or they want a useless luxury, or just something for fun; and how can anyone make every purchase and decision by weighing in on cost/benefit? Alot of emotion runs through our minds when we buy something.

Here's Mises in Human Action on the matter of rationality:
 
Human action is necessarily always rational. The term 'rational action' is therefore pleonastic and must be rejected as such. When applied to the ultimate ends of action, the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man.
 
I'd say to check the definition of rational that you are using.

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Well, bear in mind Mises also stated: "...the concepts rational and irra­tional apply only to means, never to ultimate ends. [...] Rational and irrational always mean: reasonable or not from the point of view of the ends sought. There is no such thing as absolute rationality or irrationality."

So while he makes a good case that human ends are always rational, but I don't see support that human action (which Mises describes as "purposeful behavior"...or, the application of "means") is always and necessarily rational.  In fact that quote directly states otherwise.

This is what bugs me because elswhere he states: "Action is, by definition, always rational."  He supports this in this way:

"When the expressions 'rational' and 'irrational' are applied to the means employed for the attainment of an end, such a usage has significance only from the standpoint of a definite technology. However, the use of means other than those prescribed as 'rational' by this technology can be accounted for in only two possible ways: either the "rational" means were not known to the actor, or he did not employ them because he wished to attain still other ends?perhaps very foolish ones from the point of view of the observer. In neither of these two cases is one justified in speaking of 'irrational' action."

Now, the text where that is found, Epistemological Problems of Economics was first published in 1933, and the source for the first quote, Omnipotent Government, was published in 1944.  So maybe Mises evolved a little?  Or maybe those statements don't conflict at all?

 

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Its time i read more mises.

Hmm i guess if i want to buy a cake to eat, it is rational that the cake will make me feel good, however it is bad for my health. The means are certainly irrational (getting good feeling, but having bad health, there are other ways of getting good feelings), but the ends could be (ultimately it serves my goal of feeling good).

Is this what mises is trying to say?

I told my friend that it is impossible to predict millions of people's decisions but then he just shrugs the argument and says that game theory will work; advancements in technology; trust in the superior scientists (the usual statist bullshit). I told him that empirical data only shows a certain snapshot in time, and that only predictions can be made which are not going to be 100% correct, and therefore is nearly impossible to plan an economy from only empirical data.

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 JJ -  ya i was going to give the definition of action, but you see the same problem too.

Im confused then what is absolute rationality?  Any idea?  Im guessing he means whats rational to someone doesnt mean its rational to someone else so there can never be absolute rationality? 

But if action is always rational then isnt it always absolute rationality to the person making the action?

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grant.w.underwood:
Im confused then what is absolute rationality?  Any idea?  Im guessing he means whats rational to someone doesnt mean its rational to someone else so there can never be absolute rationality?

That's exactly what he means.  From that same passage in EPoE:

"The assertion that there is irrational action is always rooted in an evaluation of a scale of values different from our own. Whoever says that irrationality plays a role in human action is merely saying that his fellow men behave in a way that he does not consider correct."

And right after he closes out the part about action by saying "Action is, by definition, always rational", he switches back to talking about ends:

"One is unwarranted in calling goals of action irrational simply because they are not worth striving for from the point of view of ones own valuations."

 

If you're interested, that passage is probably one of the best places to look:

The Distinction Between Means and Ends: The "Irrational"

 

But if action is always rational then isnt it always absolute rationality to the person making the action?

That's a contradiction of terms.  The entire reason you include the term "absolute" is to distinguish it from the individual.  When you say something is "absolute" you are indicating that it is true regardless of circumstances of any kind.  If you make the caveat that you are confining "absolute" to a realm only within a specific set of circumstances, then the term loses its meaning and becomes — to use Mises' term — pleonastic.

What you did there is a perfect example of what is commonly referred to as "over-thinking".

In that same passage I'm recommending to you, Mises discusses what "absolute rationality" would mean:

"It has never been disputed that man does not always act correctly from the objective point of view; that is, that either from ignorance of causal relations or because of an erroneous judgment of the given situation, in order to realize his ends he acts differently from the way in which he would act if he had correct information. In 1833 the method of healing wounds was different from that used in 1933, and in 2033 still another way will presumably be thought suitable. Statesmen, field marshals, and stock-market speculators act differently at present from the way in which they would act if they knew exactly all the data needed for an accurate judgment of conditions. Only a perfect being, whose omniscience and omnipresence would enable him to survey all the data and every causal relationship, could know how each erring human being would have to act at every moment if he wanted to possess the divine attribute of omniscience. If we were to attempt to distinguish rational action from irrational action, we should not only be setting ourselves up as a judge over the scales of value of our fellow men, but we should also be declaring our own knowledge to be the only correct, objective standard of knowledge. We should be arrogating to ourselves the position that only an all-knowing being has the power to occupy."

 

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JJ-  sometimes i over think simple things.  Good points, thanks.

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My take on this, and I'll show how all the quotes agree.

WARNING: Intellectual material. Put on thinking cap before reading.

Let us consider two things. First, what Mr A wants. Second, what Mr A will do to get what he wants.

Each  of these two can be looked at from two points of view, what Mr A thinks of them, and what other people think of them.

So lets label the things being discussed with numbers.

1. What Mr A wants.

2. What Mr A will do to get what he wants.

3. What Mr A thinks of 1.

4. What Mr A thinks of 2.

5. What other people think of 1.

6. What other people think of 2.

Well. that's 99% of the hard work already. All we have to do now is go through the quotes one by one and see which of the six things above Mises was talking about in a particular instance. We then have to see if for any given number above he says two different things. If not, there is no contradiction.

Also, of course, we have to see why what  he says in a particular instance applies to the particular number he chooses to talk about in that instance.

Without further ado, let's hit the quotes.

He's talking about 1 when he says: When applied to the ultimate ends of action [=1, 3, and 5], the terms rational and irrational are inappropriate and meaningless. The ultimate end of action is always the satisfaction of some desires of the acting man.

In other words, you want what you want. It's a primal thing that needs no further explanation. I want it because I want it. The human heart is a deep thing, and there is no judge who can say "You should want this" or "You are insane if you want this."

Why does Mises have this atitude about the basic wants, such as kevin silva's cake and milk? Because of something Mises wrote about in Theory and History, where he says that there is no way of deciding what is right and wrong and good and bad. Consistent with that philosophy is that if you want something, there is no way of judging it at all, and thus it can not be called rational or irrational.

About 2. he says:

1. Human action [=2] is necessarily always rational. The term 'rational action' is therefore pleonastic [= a phrase with a redundancy]  and must be rejected as such.

This is because Mises uses the word rational in the following sense: Mr A is being rational if he takes steps to get what he wants in the way he thinks is best. And Mises defines action the same way.

Notice that all this is really talking about 4, what Mr A thinks of his plans to get what he wants. Mr A naturally thinks he is doing the best he knows how.

JJ quotes Mises as saying: ...the concepts rational and irra­tional apply only to means, never to ultimate ends. [...]

Here he is talking about 5 and 6. If we are to judge what A is doing, we can only say he is not going about his goal the same we would, and we think our way is superior. We can thus say Mr A is being irrational when he tries to win the girl he loves by shooting a bullet at her. That's the first part of the quote, where he says the concepts rational and irra­tional apply only to means, [=6].

But we cannot say he is being irrational because he wants Sally instead of Molly, even though Sally is fatter and uglier and nastier in every way, and even though we would prefer Molly hands down. This is what he means in the second part of the quote, never to ultimate ends. [=5]. We already explained why he thinks this above, where we paraphrase his position in Theory and History.

If you look at the quote in context, using the link JJ provided, you'll see that's what he's talking about.

He then repeats himself for emphasis and says: Rational and irrational always mean: reasonable or not from the point of view of the ends sought. [=6] There is no such thing as absolute rationality or irrationality." [=5]

JJ then quotes Mises as saying "Action is, by definition, always rational. JJ then quotes Mises reasons for making such a statement, and careful reading will show that he is talking about 3 and 4, meaning what Mr A thinks of his means and his goals, with a bit of 5 thrown in, what others think about his ends. I leave it to the reader to go through that section and work it out, for the mind and the fingers tire.

Bottom line, no contradictions. Life is good

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grant.w.underwood:
sometimes i over think simple things.

Ya don't say...

cheeky

 

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Smiling Dave:

I leave it to the reader to go through that section and work it out, for the mind and the fingers tire.

Sounds like you need to do some nerd exercises. Gotta get those fingers in shape.

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pfft... whut evs.  I think its an important distinction to make. haha.

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Seeing as how Anthony de Jasay was a game theorist and anarchist, that he used game theory to argue against government (or so I've heard), I'm guessing that attempts to use game theory to argue for central planning are unsound at the very least.

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I remember something about Bob Murphy being something of a 'specialist' in game theory. I've also read that game theory is being used to 'redesign' microeconomics, in the sense of replacing your standard consumer behavior, et cetera, models.

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But we cannot say he is being irrational because he wants Sally instead of Molly, even though Sally is fatter and uglier and nastier in every way, and even though we would prefer Molly hands down. This is what he means in the second part of the quote, never to ultimate ends. [=5]. We already explained why he thinks this above, where we paraphrase his position in Theory and History.

But certainly we can conclude that Sally doesn't have what he really wants in a woman, that she wouldn't be good for him, and that he is mistaken about her. The only type of ultimate end we can speak of is the end as "thing-in-itself." But the end conceived this way has no fixed appearance, no other properties we can latch onto it permanently. Any state within time, such as being with Sally, can be criticized according to its rationality. Nothing is self-sufficient and everything leads to something else. Every end is also a means.

"The limits of my language mean the limits of my world." ~ Ludwig Wittgenstein
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But certainly we can conclude that Sally doesn't have what he really wants in a woman, that she wouldn't be good for him, and that he is mistaken about her.

Oh no we can't. On what basis?

The only type of ultimate end we can speak of is the end as "thing-in-itself."

That may be true and defensible, but it is certainly not Mises' position. And I don't see how you can prove the correctness of your position.

But the end conceived this way has no fixed appearance, no other properties we can latch onto it permanently.

Not sure what you mean. The "end", according to Mises, is what I want, nothing more, nothing less.

Any state within time, such as being with Sally, can be criticized according to its rationality.

Sorry, FOTH. Much as I am pleased that you read my humble posts, we once again reach a point where yours are way over my head, so to speak.

 

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Oh no we can't. On what basis?

On the basis that it is possible to know people.

That may be true and defensible, but it is certainly not Mises' position. And I don't see how you can prove the correctness of your position.

Kant already did it for me. See for example the First Antinomy. (Although he probably wouldn't call it a proof. It's just that this notion of an ultimate end is an unsupported dogma, which isn't a possible experience.)

Not sure what you mean. The "end", according to Mises, is what I want, nothing more, nothing less.

Sure, but what you want is not permanently fixed. You may want one thing and then change your mind to wanting another thing. Is this process of changing one's desires not a rational one? If Harry discovers that Sally isn't a very honest woman, and he decides he doesn't want her anymore, is that not a decision that appeals to rationality?

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Smiling Dave:

But the end conceived this way has no fixed appearance, no other properties we can latch onto it permanently.

Not sure what you mean. The "end", according to Mises, is what I want, nothing more, nothing less.

I kind of agree with FOTH. It seems to me that every end is just another means to something else. If we had one absolute final end, once we achieved that end, we would sit in perfect bliss. We would cease to progress, and we would die. This is why happiness if over-rated. Nothing will make you happy forever. The reason we progress and innovate is because we are never satisfied with where we are with regard to our lot in life. Suppose I do believe I have a final end, say to marry my high school sweet heart, turned world's sexiest lingerie model. I perform all of these tasks, employ all of these means, and through this I am able to finally take her hand in marriage. What now? Do i just keel over and die? No, I work to provide a better life, buy her a better car, live in a better house. I never stop doing this. Even if I retire, I am always working toward something, even if I appear to be doing nothing.  

As for game theory,       

Central Planning's Computation Problem

This is a really interesting speech made by Lucas Englehardt, an austrian computer science dude who ran some tests on game theory as espoused by The Venus Project using MetLab. His findings are wild, to say the least. Try to ignore his all-to-common, quick little nervous "alrights" littered throughout his speech. Here is his conclusion (but listen to the whole 14 minute speech): He ran a computation assuming 6 billion people and 80,000 goods (the number tracked for the CPI, and far far far far fewer than actually exist) and for the computer to figure out even one viable allocation method, it would take the computer 39.7 quintillion years which is 39.7 billion billion years (or 39,700,000,000,000,000,000 years). On the timeline of human history, so far we would barely even have scratched the surface of this length of time. It would be smaller than microscopic on a computer screen over 100 miles long. In fact, the big bang occurs on the same pixel as today does. This assumes products are already produced; it does not include the time needed to produce goods. It is asserted that by the time computers can provide for us, the technology will be so advanced that these figures will be antiquated. To answer this, a few physicists at Boston University have suggested that there is a maximum to how fast computers could ever hope to be made. They found that it could only be about 10 billion times faster than we have now because information and computation must always travel through a processor of some kind. So, if we divide 39.7 quintillion by 10 billion, then we're still looking at a 4 billion year process of computation for a simplified economy. 

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Tex,

It depends on the context. You wanted a certain girl. You married her. Mission accomplished. Now you want something else as well, better life, car etc. If you say that getting the girl was not the ultimate goal because you wanted other things after you got her, that is true.

But that is not what Mises meant when he used the phrase "ultimate goal". If you look at the context, you see that he was contrasting means to ends. The end is what you want, the means is what you do to get it. Now there may be a whole string of intermnediate ends before you get to the ultimate end.

For example, say you want to go fishing. You will have some intermediate goals, like filling up the gas tank, buying gear, driving to the fishing hole. All those are intermediate ends to the ultimate end of sitting around relaxed in the pleasant sun holding the fishing pole and waiting for a bite.

What Mises was saying is that someone might say that your means were irrational, meaning that, say, waving your magic wand to get the gas tank filled was irrational. He might even say that some of your intermediate goals were irrational, say if you had a goal of buying a net with big holes in it [to later catch your fish]. And he can say that because there was a better way to get to your ultimate goal than waving magic wands and buying nets that won't hold fish.

But if someone would say you are irrational for wanting to go fishing, because it is much more fun watching football and drinking beer with the guys, then Mises would say he is making a big mistake. You want what you want because you want it, and that's the final word. There is no way of judging and thus deciding that watching football is rational and fishing is irrational.

Now even if the next day you no longer want to go fishing, but want something else instead, that does not change the fatc that fishing was your ultimate goal [the way Mises was using that phrase] at the time you wanted it, even though now you want something else.

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Smiling Dave:

But if someone would say you are irrational for wanting to go fishing, because it is much more fun watching football and drinking beer with the guys, then Mises would say he is making a big mistake. You want what you want because you want it, and that's the final word. There is no way of judging and thus deciding that watching football is rational and fishing is irrational.

Now even if the next day you no longer want to go fishing, but want something else instead, that does not change the fatc that fishing was your ultimate goal [the way Mises was using that phrase] at the time you wanted it, even though now you want something else.

Ok, so the end is not irrational if we view it in a vacuum with the means used to attain it? Let's say that my ultimate goal is to live a pleasurable life, and I believing fishing all day is a good means to achieve that end. To go fishing, I believe that I need to buy a net with large holes in it and nothing else. So I use means (shitty fishing net) to achieve end (fishing) and then means (fishing) to achieve end (pleasurable life). So, fishing is, in this case, both a means and an end.
 
Given this situation, could one then say that fishing is an irrational means towards achieving the end of a pleasurable life, while, at the same time, being unable to claim that fishing is a bad end in itself? In other words, must the observer only view buying the shitty net in a vacuum with the act of fishing, and view the act of fishing in a vacuum with achieving a pleasurable life? 

 

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Everyone's ultimate goal is a pleasurable life, at least according to Mises in the first chapters of HA---maybe this is where the confusion stems from.  Who can even begin to  'judge' the means to a pleasurable life in the first place? Because "pleasurable life", as an abstract idea, is itself sitting in a vacuum if it doesn't have any qualifying statements i.e. a means to achieve that so very abstract end.  Any one end could have dozens of ends within it as life is a never ending series of means and goals(actions).  In order to go fishing all day you will still have to have goals and paths to those goals within that higher goal.  Unless you live on the water with the net in your hand(and even then) you still have to go through a series of actions by assigning smaller goals (arrive at the fishing spot) and their corresponding means(drive/walk/hitch-hike). Unless you will never dehydrate you will still have to drink water in order to fish all day.

First post, lets hope I am not a dumbass. wink
 

 

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John James:

Well, bear in mind Mises also stated: "...the concepts rational and irra­tional apply only to means, never to ultimate ends. [...] Rational and irrational always mean: reasonable or not from the point of view of the ends sought. There is no such thing as absolute rationality or irrationality."

So while he makes a good case that human ends are always rational, but I don't see support that human action (which Mises describes as "purposeful behavior"...or, the application of "means") is always and necessarily rational.  In fact that quote directly states otherwise.

 

How does that quote make an argument that ends are always rational? He says rational/irrational can only apply to means. Ends are determined by values established prior to rational consideration. 

 

It would seem that rationality has nothing to say about ends. 

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National Acrobat:
How does that quote make an argument that ends are always rational?

I'm not sure it does.  I certainly didn't say it did.

 

It would seem that rationality has nothing to say about ends.

Mises does though.

 

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John James:

Well, first of all,

http://en.wikipedia.org/wiki/Game_theory

It's basically a discipline that rests on the premise reiterated by the protagonist in the movie π...

"my assumptions: 1. Mathematics is the language of nature. 2. Everything around us can be represented and understood through numbers. 3. If you graph the numbers of any system, patterns emerge. Therefore: There are patterns everywhere in nature."

You might say game theory is the application of these assumptions to human behavior.  The basic idea is that you can predict behavior through mathematical modeling.

 

I think you're overstating the importance of mathematics to the underlying justification for the use of game theory. Formalization is simply a way to ensure a consistent use of concepts and assumptions throughout the argument and good at revealing previously unnoticed implications and conclusions. 

You could make a game theoretic argument using only words, but this would be tedious (especially after you understand the shorthand that the math represents) and allow for the imprecision. For example, Hobbes account of the social contract in Leviathan is essentially game theory.

 

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John James:

National Acrobat:
How does that quote make an argument that ends are always rational?

I'm not sure it does.  I certainly didn't say it did.

 

It would seem that rationality has nothing to say about ends.

Mises does though.

 

 

 You said "So while he makes a good case that human ends are always rational..."

 

And it's fine that Mises has something to say about ends, they're one of the more talked about topics in the social sciences so he should have his swing at it, the concept of rationality can only assume ends not explain or justify them. So saying ends are always rational doesn't make too much sense. 

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Clayton replied on Tue, Sep 18 2012 2:19 AM

Just some general points of clarification to help the discussion along.

Game theory in no way depends upon quantification. You do not need to quantify variables in order to subject them to game theoretical analysis. The key to game theory is the reduction of multi-agent decision-making scenarios to a standard set of "games" that vary on things like whether there exist winning/losing conditions, whether there are payouts or payins and how much and for what, whether information can be shared, must be shared or must be kept secret, and so on. Looked at in this way, game theory is really a set of formalisms that create standardized Gedankenexperiment shemes and establish certain basic facts that must obtain within those frameworks.

Because game theory does not require quantification of variables, and given that the internal state of "agents" (actors) within game theory is completely neglected for the sake of analyzing a game and strategies within that game and given that the Austrian method employs the Gedankenexperiment in its own way (e.g. the Evenly Rotating Economy), there is no hostility between the Austrian method and game theory.

However, I think much of game theory is simply not useful for catallactics; only games that stipulate that agents are acting voluntarily at all times could qualify to fall under the umbrella of catallactics. Game theory - or, at least, some of the less abstruse tools of game theory - may be useful for mapping out regions of praxeology that fall outside of the umbrella of catallactics.

And while much of game theory imputes to agents the same kind of omniscience that mainstream economists attribute to Homo Economicus, there is nothing barring the imposition of realistic conditions of human knowledge, reasoning - even irrationality and emotion - to game-theoretic agents. In fact, this sheds light on one way that omniscience arguments can be useful. If you begin your analysis by assuming that one or more agents are omniscient, then establish some best-case condition that must obtain within the game even for omniscient agent(s), then you can re-impose human limits of knowledge and reason and safely conclude that the same conditions must at least hold for non-omniscient agents who cannot possibly hope to choose as well as omniscient agents.

Clayton -

http://voluntaryistreader.wordpress.com
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Kelvin Silva:

Does this type of theory make central planning more viable? Thats what ive been told. I dont know much about it, and i cannot really do any type of advanced mathematics.

Anyone have good videos on the basics?

I doubt it would be viable but could it be?

 

I think any theory that provides explanatory power about social phenomena can make central planning more viable. That's actually one of the criticisms that Feyerabend made of Popper, that the logic of Popper's philosophy of social science would, ironically, lead to a type of totalitarianism. If social science were to actually succeed it what it attempts to do, then obviously central planning would become easier. 

 

Something for the more conspiratorial posters here to think about, what if someone already has figured out the social sciences?

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Clayton replied on Tue, Sep 18 2012 2:40 AM

what if someone already has figured out the social sciences?

Well I think that's what the ruling elite are, they are the elites of social science. Based on the long experience of ruling other human beings, they have an intimate empirical knowledge - inaccessible to anyone else not in the business of ruling - of human nature and the laws of social order, including how to bend or break those laws. Whether they have a theoretical knowledge matching their empirical knowledge is an open question but it doesn't really matter. For them, theoretical knowledge is a luxury, a nice-to-have. For us, theoretical knowledge is a necessity... without it, we know precious little about human nature beyond the horizons of our own personal, anecdotal experience.

Take Austrian business cycle theory, for example. This theory is a momentous achievement of human thought, worked out over many lifespans. But the ruling elite have known the basic outline of ABCT for centuries, whether they understood its full theoretical import or not. They have been debasing coins for more than a thousand years and have been the pioneers in banknotes, fiat money, fractional-reserve banking and central-banking. They've inflated currencies, collapsed them, crashed economies, instigated economic depressions and all the rest. So, they have a practical knowledge of human nature and social science that equals or exceeds the theoretical knowledge that can be derived from academic study.

Clayton -

http://voluntaryistreader.wordpress.com
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National Acrobat:
You said "So while he makes a good case that human ends are always rational..."

That doesn't mean I quoted the case.  See this is an Internet forum, which is comprised of "threads" in which a conversation between multiple people takes place.

My post was in response to someone else who quoted a passage in which Mises did make a case about ends being always rational (which is expound upon further in the full context of the quote provided in that post I was responding to.)  Notice my post begins with "Well, bear in mind Mises also stated: [...]"

The word "well" that begins the post offers extra evidence (as if it were even necessary) that it is meant as a direct response (if not continuation) of a post before it.  The word "also" indicates that what is about to follow is an example of something that Mises stated in addition to something else he stated.  As that is the first sentence of my post, obviously the "something else" Mises stated that makes the "also" necessary is located in a previous post.

I'm kind of surprised I have to explain this to someone who can read.

 

the concept of rationality can only assume ends not explain or justify them. So saying ends are always rational doesn't make too much sense.

Great.  Mises disagrees with you.

 

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I found this to be a very interesting article from Murphy, in which he critiques Game Theory when it is applied to repeated events (not just a single "game").

 

http://mises.org/daily/1404/

"Later they refer to regression analysis as 'the economist's favorite trick' (p. 161). Well I'm an economist, and my favorite trick has always been the old switcheroo." - Bob Murphy
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John James:

National Acrobat:
You said "So while he makes a good case that human ends are always rational..."

That doesn't mean I quoted the case.  See this is an Internet forum, which is comprised of "threads" in which a conversation between multiple people takes place.

My post was in response to someone else who quoted a passage in which Mises did make a case about ends being always rational (which is expound upon further in the full context of the quote provided in that post I was responding to.)  Notice my post begins with "Well, bear in mind Mises also stated: [...]"

The word "well" that begins the post offers extra evidence (as if it were even necessary) that it is meant as a direct response (if not continuation) of a post before it.  The word "also" indicates that what is about to follow is an example of something that Mises stated in addition to something else he stated.  As that is the first sentence of my post, obviously the "something else" Mises stated that makes the "also" necessary is located in a previous post.

I'm kind of surprised I have to explain this to someone who can read.

 

the concept of rationality can only assume ends not explain or justify them. So saying ends are always rational doesn't make too much sense.

Great.  Mises disagrees with you.

 

 

 

John, you're not nearly as smart as you think you are, so you might want to slow your pedantic roll just a bit. That entire first section was completely unnecessary and what possessed you to believe that it was is beyond me. Rather than lashing out in an immature fit when someone disagrees with you, perhaps you could try to understand and engage the point they're making. 

You said that Mises made a good case for the rationality of ends. Neither in the section you quoted nor in the wider selection you took the quote from (I'm assuming its the Chapter 1. Acting Man. 4. Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research link) does he make a case that ends are always rational. In fact, he explicitly agrees with me, that ends can only be assumed by rationality as ultimate givens. That analysis through praxeology can say nothing of ends, much less that they are always rational as you claim Mises posits. 

So... like a big boy this time, why don't you go through that link and point out to me where Mises makes the "good case that human ends are always rational".  

 

 

 

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National Acrobat:
John, you're not nearly as smart as you think you are, so you might want to slow your pedantic roll just a bit. That entire first section was completely unnecessary and what possessed you to believe that it was is beyond me. Rather than lashing out in an immature fit when someone disagrees with you, perhaps you could try to understand and engage the point they're making.

 

Neither in the section you quoted nor in the wider selection you took the quote from (I'm assuming its the Chapter 1. Acting Man. 4. Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research link)

I don't believe I ever quoted from that book, (let alone that section), nor did I even link to it.  But I'm happy to be proven wrong.  Go ahead and show me where I did that.

In any case, let's say I shouldn't have used the work "rational" in that context.  The point there was to illustrate that one can't argue that one's ends are irrational, which was stated in a passage I actually did quote here.

 

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John James:

National Acrobat:
John, you're not nearly as smart as you think you are, so you might want to slow your pedantic roll just a bit. That entire first section was completely unnecessary and what possessed you to believe that it was is beyond me. Rather than lashing out in an immature fit when someone disagrees with you, perhaps you could try to understand and engage the point they're making.

Ha!

You're gonna post that after the junk you just pulled? Please...

 

Neither in the section you quoted nor in the wider selection you took the quote from (I'm assuming its the Chapter 1. Acting Man. 4. Rationality and Irrationality; Subjectivism and Objectivity of Praxeological Research link)

I don't believe I ever quoted from that book, (let alone that section), nor did I even link to it.  But I'm happy to be proven wrong.  Go ahead and show me where I did that.

In any case, let's say I shouldn't have used the work "rational" in that context.  The point there was to illustrate that one can't argue that one's ends are irrational, which was stated in a passage I actually did quote here.

I guess you didn't quote from that section. The link you gave me looked like you were linking to the one in the middle (it was quite appropriate given the subject) but apparently you wanted me to read the link below that. Oh, well. Mises still agrees with the point I was making (contra your brusque response) and he doesn't make a good case for the rationality of all ends. If  you wanted to say that ends can't be judged to be irrational that's fine, but that's a very different statement from saying that all ends are rational, and it's not beyond the pale that someone would want clarification as to how you get one of those statements out of the other.   

So, for future reference how about you fight your natural response to be an ass and just get to the substance of a post. Hopefully next time you'll be able to avoid that unfortunate little episode you had there just now. 

 

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