On Wednesday, visiting economics lecturer Dr. David Dixon spoke in Parish Library on game theory, a concept that addresses decision-making patterns in individuals and how they can be applied in the real world.
Game theory is defined by the Library of Economics and Liberty as "the science of strategy" which "attempts to determine mathematically and logically the actions that 'players' should take to secure the best outcomes for themselves" in situations called "games".
Dixon discussed "friendship games", where the word friendship describes a social network, and how these networks behave.
"In these games, we have a basic model where the individual players optimize for their own well-being," Dixon said, "but then I throw in some players that optimize based on their perception of the global outcome."
Dixon divided these players into three groups: "sheep", "contrarians", and "saboteurs".
"Sheep are the ones who want to do what the majority does," Dixon said, "Contrarians are people who always want to do the opposite of the majority and saboteurs (are) something I threw in to create a dynamic player whose role is to stir up dynamics."
He then applied these roles to “elections,” where the sheep are 60 percent of non-voters, the contrarians are those who vote for the candidates who are not the party front-runner and the saboteurs disrupt the equilibrium.
"Of these three, sheep tend to have the biggest impact," Dixon said, "and the role of contrarians and saboteurs is a little more subtle and what they can do is prevent a Nash Equilibrium from coming about."
A Nash Equilibrium is where the players in a game have reached their individual decisions and have no incentive to change their mind, resulting in a "happy" network.
"Game theory has an interesting pedigree that goes back to industrial organizations with Antoine Cournot looking at why some industries have lots of competitors and some industries only have a few," Dixon said.
Dixon said that there are two well known "one-shot" games in game theory, the Prisoner's Dilemma and the Battle of the Sexes.
"(They) have very distinct outcomes," Dixon said. "The beauty of game theory is that you can identify mathematically what's going to happen if certain conditions are met in an interaction."
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Dixon said that the Prisoner's Dilemma is used in game theory models of international relations where two nations are in conflict.
"You reach (a Nash Equilibrium) simply because you don't trust the other person," Dixon said. "There is possibly a better outcome here, but it's a risky outcome, and so it becomes what we call a 'lose-lose' outcome."
Dixon said that the Battle of the Sexes game is one based on romantic relationships and what one's significant other wants to do on a date where the outcome is 50/50 where they made the right choice.
"What game theory tells you then, if you have a game that works out to Battle of the Sexes, it's that some outcomes are win sometimes, lose sometimes," Dixon said. "Even when you can trust the other person."
Dixon said that the outcomes of these games changes greatly when the prisoners are allowed to cooperate and communicate, where the prisoners and lovers can work out favorable outcomes from communication.
"Both of these outcomes change a lot if you coordinate but also if you play the game multiple times with the same person," Dixon said.
Dixon said that cooperation and communication between players needs is fundamental in friendships where social needs are met by a node having the resources other nodes need.
"These are called 'social contingencies,'" Dixon said. "These are not present in game theory literature because they involve my happiness with inputs from everybody around me."
Dixon said that often times there are problems with social contingencies due to the influence of sheep, or the majority.
"There are times when there are institutional pathologies," Dixon said, "where if the sheep have their way, we're never going to have full enfranchisement. We would still have slavery if the majority had their way at a crucial time in our history."
Dixon said that while social contingencies of sheep have often times worked out for the greater good, that there are times where the contrarians and saboteurs have influenced the majority for the greater good.
"In that sense, we kind of like saboteurs and contrarians because they are the sand that produces the pearl in the oyster; the irritants," Dixon said.
Dixon said that this model could explain why historically voters have voted against their own political self-interest.
"(The lecture) was really interesting," said Jamin Ragle, a university libraries system specialist and lecture attendee. "I work for the University, so I'm in support of people like Dr. Dixon."
Ragle doesn't plan to use Dixon's information in his field, but can see it's potential for application in various fields of study.
Fin Martinez is a reporter for the Daily Lobo. He can be reached at news@dailylobo.com or on Twitter @FinMartinez.
