A Brief Introduction to the Basics of Game Theory(papers.ssrn.com)
papers.ssrn.com
A Brief Introduction to the Basics of Game Theory
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1968579
23 comments
I think a basic overview of game theory should also discuss Pareto optimality to some extent. You can have 100% of participants operating in a locally-ideal way while still creating problems in aggregate.
Tragedy of the commons / bounded rationality for example.
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
https://en.wikipedia.org/wiki/Tragedy_of_the_commons
The Tragedy of the Commons has long been discredited by the noble winning game theorist Elinor Ostrom and her research of numerous case studies on the commons, and how people coordinate for collective resilence and prosperity (through rules and by auditing and retaliating against abusers and selfish exploiters)
The infamous "tragedy of the commons" rational resource optimization game is often cited as justification for machiavellian exploitation, but humans being social creatures are subject to reputations, and have sophisticated methods of communication, cooperation, reputation, trust, accountability, auditing, and retaliation capabilities. [1] [2]
Elinor Ostrom's "Rules, games, and common-pool resources" and Robert Axelrod's work "The Evolution of Cooperation" both explain game theory in the context of human scale realities. Of particular interest to the hacker community would be Ostrom's Common Pool Resource principles, which are totally applicable to the way we form communities anywhere. Decenteralized or in any form.
At the core of game theory and human civilization is communication and trust. The abuse of mass media to manipulate populations knows the power of communication and cultural narratives, and we're in a new enclosure [3] [4] of the commons and as media communication networks are being used to exploit through "hypernormalization" and "accelerationism" [5][6][7][8]
For a better applicable human scale game theory primer, check out Bruce Schneier's (yes, the same legendary cryptographer Bruce), "Liars and Outliers"
[1] https://ncase.me/trust/
[2] https://en.wikipedia.org/wiki/Elinor_Ostrom#Design_principle...
[3] https://en.wikipedia.org/wiki/Enclosure
[4] https://en.wikipedia.org/wiki/The_Dawn_of_Everything
[5] on Cybernetics and the 20th century "All Watched Over by Machines of Loving Grace" by Adam Curtis https://thoughtmaybe.com/all-watched-over-by-machines-of-lov...
[6] on propaganda and 20th century culture "The Century of the Self" by Adam Curtis https://thoughtmaybe.com/the-century-of-the-self/
[7] on the hyperreal news and the use of crisis to manipulate populations and normalize a polycrisis - "Hypernormalization" by Adam Curtis https://thoughtmaybe.com/hypernormalisation/
[8] https://en.wikipedia.org/wiki/Accelerationism
The infamous "tragedy of the commons" rational resource optimization game is often cited as justification for machiavellian exploitation, but humans being social creatures are subject to reputations, and have sophisticated methods of communication, cooperation, reputation, trust, accountability, auditing, and retaliation capabilities. [1] [2]
Elinor Ostrom's "Rules, games, and common-pool resources" and Robert Axelrod's work "The Evolution of Cooperation" both explain game theory in the context of human scale realities. Of particular interest to the hacker community would be Ostrom's Common Pool Resource principles, which are totally applicable to the way we form communities anywhere. Decenteralized or in any form.
At the core of game theory and human civilization is communication and trust. The abuse of mass media to manipulate populations knows the power of communication and cultural narratives, and we're in a new enclosure [3] [4] of the commons and as media communication networks are being used to exploit through "hypernormalization" and "accelerationism" [5][6][7][8]
For a better applicable human scale game theory primer, check out Bruce Schneier's (yes, the same legendary cryptographer Bruce), "Liars and Outliers"
[1] https://ncase.me/trust/
[2] https://en.wikipedia.org/wiki/Elinor_Ostrom#Design_principle...
[3] https://en.wikipedia.org/wiki/Enclosure
[4] https://en.wikipedia.org/wiki/The_Dawn_of_Everything
[5] on Cybernetics and the 20th century "All Watched Over by Machines of Loving Grace" by Adam Curtis https://thoughtmaybe.com/all-watched-over-by-machines-of-lov...
[6] on propaganda and 20th century culture "The Century of the Self" by Adam Curtis https://thoughtmaybe.com/the-century-of-the-self/
[7] on the hyperreal news and the use of crisis to manipulate populations and normalize a polycrisis - "Hypernormalization" by Adam Curtis https://thoughtmaybe.com/hypernormalisation/
[8] https://en.wikipedia.org/wiki/Accelerationism
> At the core of game theory and human civilization is communication and trust.
No and no. Game theory is game theory. When Nash says: "Optimal move for non-cooperative participants" there is no communication and no trust. And it is still game theory. The Wikipedia page on the Nash equilibrium mentions game theory 42 times.
I'm not saying what you're mentioning ain't also game theory.
But you're putting an ideological/political motive to freaking maths to then reframe what "game theory" means in your own view of the world.
As a side note I'll point that humans do play games: from toddler to grown up adults. Game theory also applies to something called "games": be it poker or chess or Go or whatever.
Not everything has to be seen through the lens of exploitation / evil capitalism / gentle communism (collective resilience) / etc.
No and no. Game theory is game theory. When Nash says: "Optimal move for non-cooperative participants" there is no communication and no trust. And it is still game theory. The Wikipedia page on the Nash equilibrium mentions game theory 42 times.
I'm not saying what you're mentioning ain't also game theory.
But you're putting an ideological/political motive to freaking maths to then reframe what "game theory" means in your own view of the world.
As a side note I'll point that humans do play games: from toddler to grown up adults. Game theory also applies to something called "games": be it poker or chess or Go or whatever.
Not everything has to be seen through the lens of exploitation / evil capitalism / gentle communism (collective resilience) / etc.
OK, the OP you replied to conflated game theory and human behavior.
But the GP they were responding to incorrectly conflated game theory and Tragedy of the Commons (which is human behavior).
And my side note is that humans playing games don't follow game theory, because they aren't the actors presumed by that math field. When I play a child in a game, I want them to win a few and lose a few. When I play in Vegas for money, I only want to win (but even playing there proves I'm not rational...).
(My side-side note: this isn't limited to humans. My previous dog met a puppy on a walk, and invited him to play Tug of War. Dexter let the puppy win 5 out of 10 matches...!)
But the GP they were responding to incorrectly conflated game theory and Tragedy of the Commons (which is human behavior).
And my side note is that humans playing games don't follow game theory, because they aren't the actors presumed by that math field. When I play a child in a game, I want them to win a few and lose a few. When I play in Vegas for money, I only want to win (but even playing there proves I'm not rational...).
(My side-side note: this isn't limited to humans. My previous dog met a puppy on a walk, and invited him to play Tug of War. Dexter let the puppy win 5 out of 10 matches...!)
>humans playing games don't follow game theory
The problem here is game theory is actually a huge set of different games/formulas based on cooperative and non-cooperative games.
The base tragedy of the commons is what happens in a winner take all non-cooperative game. Humans over time figured out that this behavior generally sucks and leads to less than optimal outcomes for most of the entities in the game. The tragedy of the commons is then overcome by forming a cooperative game (think tit-for-tat) where defectors are punished.
The problem then arises again, not at an individual level but at things like state/nation level where two non-cooperative entities, even though they individually don't want to incorrectly use a resource, will incorrectly use said resource to prevent the other entity from having it.
The problem here is game theory is actually a huge set of different games/formulas based on cooperative and non-cooperative games.
The base tragedy of the commons is what happens in a winner take all non-cooperative game. Humans over time figured out that this behavior generally sucks and leads to less than optimal outcomes for most of the entities in the game. The tragedy of the commons is then overcome by forming a cooperative game (think tit-for-tat) where defectors are punished.
The problem then arises again, not at an individual level but at things like state/nation level where two non-cooperative entities, even though they individually don't want to incorrectly use a resource, will incorrectly use said resource to prevent the other entity from having it.
The tragedy of the commons is in fact modeled as a game in the game-theoretic sense. It's called the CC–PP Game: https://en.wikipedia.org/wiki/CC%E2%80%93PP_game.
bob1029 wrote that "You can have 100% of participants operating in a locally-ideal way while still creating problems in aggregate", and the tragedy of the commons is exactly an instance of this. SaltyBackendGuy is right.
bob1029 wrote that "You can have 100% of participants operating in a locally-ideal way while still creating problems in aggregate", and the tragedy of the commons is exactly an instance of this. SaltyBackendGuy is right.
CC-PP is disproven directly from Elinor Ostrom's research studies in her book "Governing the Commons".
Elinor literally won a Nobel Prize for disproving the tragedy of the commons.
> It was long unanimously held among economists that natural resources that were collectively used by their users would be over-exploited and destroyed in the long-term. Elinor Ostrom disproved this idea by conducting field studies on how people in small, local communities manage shared natural resources, such as pastures, fishing waters, and forests. She showed that when natural resources are jointly used by their users, in time, rules are established for how these are to be cared for and used in a way that is both economically and ecologically sustainable.
https://www.nobelprize.org/prizes/economic-sciences/2009/ost...
https://www.nobelprize.org/uploads/2018/06/ostrom_lecture.pd...
> Ostrom showed that many real-world “commons dilemmas” are not fixed one-shot prisoner’s dilemmas but repeated interactions where people can communicate, build trust, and design rules, impose retaliation to rule breakers, and redefine the rules of the underlying game structure as time goes on.
Elinor literally won a Nobel Prize for disproving the tragedy of the commons.
> It was long unanimously held among economists that natural resources that were collectively used by their users would be over-exploited and destroyed in the long-term. Elinor Ostrom disproved this idea by conducting field studies on how people in small, local communities manage shared natural resources, such as pastures, fishing waters, and forests. She showed that when natural resources are jointly used by their users, in time, rules are established for how these are to be cared for and used in a way that is both economically and ecologically sustainable.
https://www.nobelprize.org/prizes/economic-sciences/2009/ost...
https://www.nobelprize.org/uploads/2018/06/ostrom_lecture.pd...
> Ostrom showed that many real-world “commons dilemmas” are not fixed one-shot prisoner’s dilemmas but repeated interactions where people can communicate, build trust, and design rules, impose retaliation to rule breakers, and redefine the rules of the underlying game structure as time goes on.
No, Ostrom's law doesn't disprove anything. No, that's not why she was awarded the prize.
Ostrom accepted that there's a real problem, and that historically it has led to catastrophe. Her contribution was to see that in practice these catastrophes have been relatively infrequent, and why. This turns out to be an interesting story because previous work tended toward centralized control (government takeover or privatization) as a cure (global optimization), while most real-world cases have been dealt with effectively by community organization (local optimization). In other words, Ostrom didn't disprove the problem. She found alternative solutions.
But the dynamic of the tragedy of the commons is real. The Newfoundland cod fisheries did collapse. And there are many active catastrophes playing out at different scales and speeds as we speak.
Ostrom accepted that there's a real problem, and that historically it has led to catastrophe. Her contribution was to see that in practice these catastrophes have been relatively infrequent, and why. This turns out to be an interesting story because previous work tended toward centralized control (government takeover or privatization) as a cure (global optimization), while most real-world cases have been dealt with effectively by community organization (local optimization). In other words, Ostrom didn't disprove the problem. She found alternative solutions.
But the dynamic of the tragedy of the commons is real. The Newfoundland cod fisheries did collapse. And there are many active catastrophes playing out at different scales and speeds as we speak.
Elinor Ostrom proved The Commons can be collectively owned and managed. It's nothing to do with the scale being small or large if you actually read her research studies and the game theory models she published you would know that but instead you seemed to have use an LLM to frame your argument.
The main findings from Ostrom's research on the success of managing commonly owned pooled resources, and how the Tragedy of the Commons was wrong, is basically just enforcing audits, and retaliating against selfish individuals as part of a system of rules and social reputation. The other major game theory element is pointing out humans interact many times not just once, and that much of the original game theory models had arbitrary rules like players cannot communicate, or assuming the game only happens once, or assuming that the game cannot change or new players may join the game and punish the players that have been mismanaging social trust and resource policies.
"Conventional wisdom says that common ownership is a bad idea. “That which is owned by all is cared for by none.” Therefore, all scarce resources should either be owned privately by individuals or be regulated by central authorities. Or should they? Elinor Ostrom rejects that conventional wisdom. Based on numerous empirical studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, she concludes that common property is often well tended."
There's a study of the grasslands in Mongolia, but that's just renforcing Ostrom's findings that the lack of auditing or policies for sustainability is what drives unsustainable behavior. Mongolia started to increase livestock and cashmere exports and their economy has not invested in modernizing or maintaining sustainable industrial scale livestock practices. Goats for cashmere has been a major source of income for Mongolian nomads but because they are essentially living out libertarian economics it's just more proof to validate the game theory factors Ostrom won the nobel prize for.
https://www.nobelprize.org/prizes/economic-sciences/2009/ill...
From the Nobel Prize website:
The main findings from Ostrom's research on the success of managing commonly owned pooled resources, and how the Tragedy of the Commons was wrong, is basically just enforcing audits, and retaliating against selfish individuals as part of a system of rules and social reputation. The other major game theory element is pointing out humans interact many times not just once, and that much of the original game theory models had arbitrary rules like players cannot communicate, or assuming the game only happens once, or assuming that the game cannot change or new players may join the game and punish the players that have been mismanaging social trust and resource policies.
"Conventional wisdom says that common ownership is a bad idea. “That which is owned by all is cared for by none.” Therefore, all scarce resources should either be owned privately by individuals or be regulated by central authorities. Or should they? Elinor Ostrom rejects that conventional wisdom. Based on numerous empirical studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, she concludes that common property is often well tended."
There's a study of the grasslands in Mongolia, but that's just renforcing Ostrom's findings that the lack of auditing or policies for sustainability is what drives unsustainable behavior. Mongolia started to increase livestock and cashmere exports and their economy has not invested in modernizing or maintaining sustainable industrial scale livestock practices. Goats for cashmere has been a major source of income for Mongolian nomads but because they are essentially living out libertarian economics it's just more proof to validate the game theory factors Ostrom won the nobel prize for.
https://www.nobelprize.org/prizes/economic-sciences/2009/ill...
From the Nobel Prize website:
Elinor Ostrom identifies seven keys to successful cooperation:
• Rules clearly define entitlements.
• Conflict resolution mechanisms are in place.
• Duties stand in reasonable proportion to benefits.
• Monitoring and sanctioning is carried out either by the users themselves or by someone who is accountable to the users.
• Sanctions are graduated, mild for a first violation and stricter as violations are repeated.
• Decision processes are democratic.
• The rights of users to self-organize are clearly recognized by outside authorities`> It's nothing to do with the scale being small or large if you actually read her research studies
You appear to be responding to the words 'global' and 'local', which are terms from mathematical optimization and have quite literally nothing to do with 'scale'.
That aside, you continue to misunderstand all of this on a basic level. The tragedy of the commons is a description of a dynamic. That dynamic is real. Ostrom acknowledged that it's real. Her work has value because it's real. Your repeated claim that she "disproved" it is simply wrong. There's nothing else to say here.
On that note, given your struggles with the subject matter, maybe don't accuse other people of being LLMs.
You appear to be responding to the words 'global' and 'local', which are terms from mathematical optimization and have quite literally nothing to do with 'scale'.
That aside, you continue to misunderstand all of this on a basic level. The tragedy of the commons is a description of a dynamic. That dynamic is real. Ostrom acknowledged that it's real. Her work has value because it's real. Your repeated claim that she "disproved" it is simply wrong. There's nothing else to say here.
On that note, given your struggles with the subject matter, maybe don't accuse other people of being LLMs.
Okay fair point, so it seems we're miscommunicating the semantics. In math, there's proofs, so I'm not sure what term is better to say other than disprove, or to say the original claims of the Tragedy of the Commons has been refuted as dependent on false pretext or premise.
The meta problem with The Tragedy of the Commons is it was communicated almost as if it were some law of physics but the rules are synthetic and when the framework of ToC enters the real world it is invalidated and defeated by the human systems it exists in. ToC became a reference as a narrative weapon to justify social engineering policies, where lobbyists claim it as some sort of scientific finding. Ostrom researched case studies of common pool resources, and identified how to prevent the tragedy of antisocial exploitation through a system of accountability, auditing, and explicit retaliations. ToC is basically just libertarian/anarcho-capital dynamics.
So sure, ToC behavior exists and is a problem. Ostrom found the solutions to fix the problem.
The meta problem with The Tragedy of the Commons is it was communicated almost as if it were some law of physics but the rules are synthetic and when the framework of ToC enters the real world it is invalidated and defeated by the human systems it exists in. ToC became a reference as a narrative weapon to justify social engineering policies, where lobbyists claim it as some sort of scientific finding. Ostrom researched case studies of common pool resources, and identified how to prevent the tragedy of antisocial exploitation through a system of accountability, auditing, and explicit retaliations. ToC is basically just libertarian/anarcho-capital dynamics.
So sure, ToC behavior exists and is a problem. Ostrom found the solutions to fix the problem.
Game theory is made up of political ideologies, and very often applied to justify politcal ideologies the most obvious being when game theory is cited to justify economic ideologies through synthetic policies like bail outs or stock buy backs.
> But you're putting an ideological/political motive to freaking maths to then reframe what "game theory" means in your own view of the world.
Figures don't lie but liars figure.
"The contemporary era constantly proclaims itself as post-ideological, but this denial of ideology only provides the ultimate proof that we are more than ever embedded in ideology. Ideology is always a field of struggle - among other things, the struggle for appropriating past traditions." - Žižek
> But you're putting an ideological/political motive to freaking maths to then reframe what "game theory" means in your own view of the world.
Figures don't lie but liars figure.
"The contemporary era constantly proclaims itself as post-ideological, but this denial of ideology only provides the ultimate proof that we are more than ever embedded in ideology. Ideology is always a field of struggle - among other things, the struggle for appropriating past traditions." - Žižek
“At every period of history, people have believed things that were just ridiculous, and believed them so strongly that you risked ostracism or even violence by saying otherwise. If our own time were any different, that would be remarkable. As far as I can tell it isn't.” ― Paul Graham
I think think this must be why so many advanced level texts are couches in "introduction to..." language. Maybe it's a concession to not being able to cover every topic!
Because my own introduction was through combinatorial game theory, I always get excited to see some hackenbush diagrams and rarely do when the subject is mentioned.
Because my own introduction was through combinatorial game theory, I always get excited to see some hackenbush diagrams and rarely do when the subject is mentioned.
Pareto efficiency is a welfare economics concept. In game theory, the closest you can get to that is a Nash equilibrium.
Pareto optimal is definitely a core concept in game theory. It says that no other vector beats it in every dimension (or at least as good in all but one, and better in at least one).
I wish more business / product people understood this concept. When a product has been refined enough to approach Pareto optimality (at least on the dimensions the product is easily measured), it's all too common for people to chase improvements to one metric at a time, and when that runs out, switch to another metric. This results in going in circles (make metric A go up-up-up, forcing metric B down-down-down, then make B go up-up-up while forcing A to go down-down-down - it's worse than this because multiple dimensions go up/down together, making it harder to spot). Sometimes these cycles are over a period of quarters or years, making it even harder to spot because cycles are slower than employee attrition.
This is not independent of Goodhart's Law[1]. I've seen entire product orgs, on a very mature product (i.e., nearing the Pareto frontier for the metrics that are tracked), assign one metric per PM and tie PM comp to their individual metric improving. Then PMs wheel and deal away good features because "don't ship your thing that hurts my metric and I won't ship my thing that hurts yours" - and that's completely rational given the incentives. Of course the best wheelers-and-dealers get the money/promotions. So the games escalate ("you didn't deal last time, so it's going to cost you more this time"). Eventually negative politics explode and it's all just a reality TV show. Meanwhile engineers who don't have an inside view of what's going on are left wondering why PMs appear to be acting insane with ship/no-ship decisions.
If more people understood Pareto optimality and Goodhart's Law, even at a surface level, I think being "data driven" would be a much better thing.
[1] Goodhart's Law: when a measure becomes a target, it ceases to be a good measure
This is not independent of Goodhart's Law[1]. I've seen entire product orgs, on a very mature product (i.e., nearing the Pareto frontier for the metrics that are tracked), assign one metric per PM and tie PM comp to their individual metric improving. Then PMs wheel and deal away good features because "don't ship your thing that hurts my metric and I won't ship my thing that hurts yours" - and that's completely rational given the incentives. Of course the best wheelers-and-dealers get the money/promotions. So the games escalate ("you didn't deal last time, so it's going to cost you more this time"). Eventually negative politics explode and it's all just a reality TV show. Meanwhile engineers who don't have an inside view of what's going on are left wondering why PMs appear to be acting insane with ship/no-ship decisions.
If more people understood Pareto optimality and Goodhart's Law, even at a surface level, I think being "data driven" would be a much better thing.
[1] Goodhart's Law: when a measure becomes a target, it ceases to be a good measure
Cybernetics has devolved into KPI metrics with accelerationism as a treat.
Apparently documents from Google's antitrust case revealed the search algorithm was adjusted to give worse results in order to force the KPI for AdSense to drive quarterly earnings reports.
> “I care more about revenue that the average person but think we can all agree that for all of our teams trying to live in high cost areas another $[redacted] in stock price loss will not be great for morale, not to mention the huge impact on our sales team.
> “I don’t want the message to be ‘we’re doing this thing because the Ads team needs revenue.’ That’s a very negative message.
> But my question to you is – based on above – what do we think is the best decision for Google overall?
> …Are there other ranking tweaks we can push out quickly?” - Dischler
Anil Sabharwal, the Chrome executive: > “1…we were able to get launch approval to rollout two changes (entity suggest and tail suggest) that increase queries by [redacted]% and [redacted]% respectively.
> 2. We are going to immediately start experiments to improve search ranking in the omnibox (more search results and nudging search to the top).”
[1] https://www.searchenginejournal.com/google-execs-scheme-to-i...
Apparently documents from Google's antitrust case revealed the search algorithm was adjusted to give worse results in order to force the KPI for AdSense to drive quarterly earnings reports.
> “I care more about revenue that the average person but think we can all agree that for all of our teams trying to live in high cost areas another $[redacted] in stock price loss will not be great for morale, not to mention the huge impact on our sales team.
> “I don’t want the message to be ‘we’re doing this thing because the Ads team needs revenue.’ That’s a very negative message.
> But my question to you is – based on above – what do we think is the best decision for Google overall?
> …Are there other ranking tweaks we can push out quickly?” - Dischler
Anil Sabharwal, the Chrome executive: > “1…we were able to get launch approval to rollout two changes (entity suggest and tail suggest) that increase queries by [redacted]% and [redacted]% respectively.
> 2. We are going to immediately start experiments to improve search ranking in the omnibox (more search results and nudging search to the top).”
[1] https://www.searchenginejournal.com/google-execs-scheme-to-i...
Why Flip a Coin is a really great book about game theory. Easy to read, very little assumed knowledge, and lots of very interesting and counterintuitive examples and situations. Also, despite the introductory nature - still gets into the math in a rigorous way.
Some good resources on Game Theory;
1) Game Theory: A Nontechnical Introduction by Morton Davis.
2) Behavioral Game Theory: Experiments in Strategic Interaction by Colin Camerer.
1) Game Theory: A Nontechnical Introduction by Morton Davis.
2) Behavioral Game Theory: Experiments in Strategic Interaction by Colin Camerer.