Ariel Rubinstein
RWER Blog Lars Syll: Victims of Game Theory
Imagine you and someone you do not know can share $100. It is up to you to propose how to divide the $100 between the two of you, and the other player will need to accept or reject your proposal. If he rejects the proposal, neither of you will receive anything. What sum will you offer the other player?
I have data on the choices of about 12,300 people, most of them students, who were asked this question. Nearly half of the participants (49%) offered the other player the fair offer of $50 …
The participants in the experiment who make the embarrassing offer of just $1 because they learned this in a game theory course are again the distinguished members of the Victims of Game Theory organization. And if they played the game in real life, their achievements would be inferior to those who had not become wise by studying game theory.
RWER Post: Game Theory, Bernard Guerrien
Nearly every book on game theory begins with the sentence: ‘Game theory is relevant to …’ and is followed by an endless list of fields, such as nuclear strategy, financial markets, the world of butterflies and flowers, and intimate situations between men and women. Articles citing game theory as a source for resolving the world’s problems are frequently published in the daily press. But after nearly forty years of engaging in this field, I have yet to find even a single application of game theory in my daily life” (Rubinstein, 2013, my italics).