Sublime

The take-home message from Schelling’s story—that incentives sometimes backfire—is familiar to psychologists.

Thomas Schelling in his wonderful essay “The Life You Save May Be Your Own.”

Professor Howard Raiffa’s maximum bid of others (or MBOO, pronounced “maboo”) analysis, which captures the fundamental trade-off in graphical form.

Game theory can explain these outcomes. While the best outcome for everyone would be to cool the spiral, for any individual actor in the game the personal best outcome is to demand a price rise as the environment allows them to make this demand, and this leaves everyone worse off in the end.

There frankly is a hell of a lot of value in the game theory and economics literature.

Realistically, agents not identical, don’t know other agents’ circumstances or likely behavior; or situation complicated and not fully known. There is fundamental uncertainty: Therefore “the problem” is not well-defined; Therefore “rationality” is not well-defined; Therefore “optimal” behavior is not well-defined; Behavior and outcome unlikely to b

it deals with the evolution of social

This is one of the fundamental distinctions in Game Theory, namely, the number of persons—distinct sets of interests—that are present in the game. The form of analysis and the entire character of the situation depend on this number. There are three values, for the number of persons, which have special significance: one, two, and more-than-two.