Advertisement

Erkenntnis

, Volume 38, Issue 3, pp 371–404 | Cite as

Modern and postmodern challenges to game theory

  • Yanis Varoufakis
Article

Abstract

Equilibrium game theory borrows from neoclassical economics its rationality concept which it immediately puts to work in order to produce the basic results it needs for building an elaborate narrative of social interaction. This paper focuses on some recent objections to game theory's use of rationality assumptions in general, and of backward induction and subgame perfection in particular, and interprets them in the light of the postmodern critique of the grand meta-narratives which social theorists often rely on for social explanation. The paper presents a defence of game theory which seeks to accommodate the postmodern critique. However, it goes on to show that such a defence is illegitimate and claims that the problem lies with the faulty conceptualisation of the main concept on which game theory rests: that of Reason. Having established the nature of the problem, it considers three alternative interpretations (Humean, postmodern and Hegelian) of why the problem resists logical solutions and of its significance for social theory.

Keywords

Social Interaction Game Theory Basic Result Social Theorist Alternative Interpretation 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Aristotle: 1987,Nicomachean Ethics, transl. by J. Welson, Prometheus, New York.Google Scholar
  2. Bernheim, D.: 1984, ‘Rationalisable Strategic Behaviour’,Econometrica 52, 1007–28.Google Scholar
  3. Binmore, K.: 1987, 1988, ‘Modeling Rational Players: Parts I and II’,Economics and Philosophy 3, 179–214 and4, 9–55.Google Scholar
  4. Derrida, J.: 1978,Writing and Difference, Routledge and Kegan Paul, London.Google Scholar
  5. Finelli, R.: 1990, ‘Production of Commodities and Production of Images: Reflection on Modernism and Postmodernism’, mimeo, Faculty of Philosophy, University of Rome.Google Scholar
  6. Foucault, M.: 1967,Madness and Civilisation, Tavistock, London.Google Scholar
  7. Harsanyi, J.: 1973, ‘Games with Randomly Disturbed Payoffs: a New Rationale for Mixed Strategies’,International Journal of Game Theory 2, 1–23.Google Scholar
  8. Hegel, G. W. F.: 1931,The Phenomenology of Mind, translated by J. Baillie, London.Google Scholar
  9. Kirsch, J.: 1966,Shakespeare's Royal Self, Putnam and Sons, New York.Google Scholar
  10. Kreps, D., P. Milgrom, J. Roberts, and R. Wilson: 1982, ‘Rational Cooperation in the Finitely Repeated Prisoner's Dilemma’,Journal of Economic Theory 27, 245–52.Google Scholar
  11. Levi-Strauss, C.: 1966,The Savage Mind, Weidenfeld and Nicholson, London.Google Scholar
  12. Lyotard, J.-F.: 1984,The Postmodern Condition: A Report on Knowledge, Manchester University Press, Manchester.Google Scholar
  13. Norris, C.: 1985,The Contest of Faculties: Philosophy and Theory After Deconstruction, Meuthen, London.Google Scholar
  14. Nietzsche, F.:On Truth and Falsity in their Ultramoral Sense, in Levy, O.: 1964,The Complete Works of Friedrich Nietzsche, New York.Google Scholar
  15. Peirce, C. S.: 1932,Collected Papers Vol. 2, Harvard University Press, Cambridge Mass.Google Scholar
  16. Pettit, F. and R. Sugden: 1989, ‘The Paradox of Backward Induction’,Journal of Philosophy,LXXXVI, 169–82.Google Scholar
  17. Skyrms, B.: 1990,The Dynamics of Rational Deliberation, Harvard University Press, Cambridge Mass.Google Scholar
  18. Sugden, R.: 1989, ‘Game Theory without Backward Induction’, mimeo, University of East Anglia.Google Scholar
  19. Sugden, R.: 1989b, ‘Spontaneous Order’,Journal of Economic Perspectives,3, 118–25.Google Scholar
  20. Sugden, R.: 1991, ‘Rational Choice: A Survey of Contributions from Economics and Philosophy’,The Economic Journal 101, 751–85.Google Scholar
  21. Varoufakis, Y.: 1991,Rational Conflict, Basil Blackwell, Oxford.Google Scholar

Copyright information

© Kluwer Academic Publishers 1993

Authors and Affiliations

  • Yanis Varoufakis
    • 1
  1. 1.Department of EconomicsUniversity of SydneySydneyAustralia

Personalised recommendations