Challenging, with several powerful arguments, some of our deepest beliefs about rationality, morality, and personal identity, Parfit claims that we have a false view about our own nature. It is often rational to act against our own best interersts, he argues, and most of us have moral views that are self-defeating. We often act wrongly, although we know there will be no one with serious grounds for complaint, and when we consider future generations it is very hard to avoid conclusions (...) that most of us will find very disturbing. (shrink)

"The best book available for non-mathematicians." — Contemporary Psychology. Superb nontechnical introduction to game theory and related disciplines, primarily as applied to the social sciences. Clear, comprehensive coverage of utility theory, 2-person zero-sum games, 2-person non-zero-sum games, n-person games, individual and group decision-making, much more. Appendixes. Bibliography. Graphs and figures.

This book presents the definitive exposition of 'prospect theory', a compelling alternative to the classical utility theory of choice. Building on the 1982 volume, Judgement Under Uncertainty, this book brings together seminal papers on prospect theory from economists, decision theorists, and psychologists, including the work of the late Amos Tversky, whose contributions are collected here for the first time. While remaining within a rational choice framework, prospect theory delivers more accurate, empirically verified predictions in key test cases, as well as (...) helping to explain many complex, real-world puzzles. In this volume, it is brought to bear on phenomena as diverse as the principles of legal compensation, the equity premium puzzle in financial markets, and the number of hours that New York cab drivers choose to drive on rainy days. Theoretically elegant and empirically robust, this volume shows how prospect theory has matured into a new science of decision making. (shrink)

One of Hume's most well-known works and a masterpiece of philosophy, A Treatise of Human Nature is indubitably worth taking the time to read.

For most of the problems that economists consider, the assumption that agents are self-interested works well enough, generating predictions that are broadly consistent with observation. In some significant cases, however, we find economic behavior that seems to be inconsistent with self-interest. In particular, we find that some public goods and some charitable ventures are financed by the independent voluntary contributions of many thousands of individuals. In Britain, for example, the lifeboat service is entirely financed by voluntary contributions. In all rich (...) countries, charitable appeals raise large amounts of money for famine relief in the Third World. The willingness of individuals to contribute to such projects is an economic fact that requires an explanation. (shrink)

For most of the problems that economists consider, the assumption that agents are self-interested works well enough, generating predictions that are broadly consistent with observation. In some significant cases, however, we find economic behavior that seems to be inconsistent with self-interest. In particular, we find that some public goods and some charitable ventures are financed by the independent voluntary contributions of many thousands of individuals. In Britain, for example, the lifeboat service is entirely financed by voluntary contributions. In all rich (...) countries, charitable appeals raise large amounts of money for famine relief in the Third World. The willingness of individuals to contribute to such projects is an economic fact that requires an explanation. (shrink)

Edna Ullmann-Margalit provides an original account of the emergence of norms. Her main thesis is that certain types of norms are possible solutions to problems posed by certain types of social interaction situations. She presents illuminating discussions of Prisoners' Dilemma, co-ordination, and inequality situations.

When is a moral theory self-defeating? I suggest the following. There are certain things we ought to try to achieve. Call these our moral aims. Our moral theory would be self-defeating if we believed we ought to do what will cause our moral aims to be worse achieved. Is this ever true? If so, what does it show?

Newcomb's problem and similar cases show the need to incorporate causal distinctions into the theory of rational decision; the usual noncausal decision theory, though simpler, does not always give the right answers. I give my own version of causal decision theory, compare it with versions offered by several other authors, and suggest that the versions have more in common than meets the eye.

Focal points seem to be important in helping players coordinate their strategies in coordination problems. Game theory lacks, however, a formal theory of focal points. This paper proposes a theory of focal points that is based on individual rationality considerations. The two principles upon which the theory rest are the Principle of Insufficient Reason (IR) and a Principle of Individual Team Member Rationality. The way IR is modelled combines the classic notion of description symmetry and a new notion of pay-off (...) symmetry, which yields different predictions in a variety of games. The theory can explain why people do better than pure randomization in matching games. (shrink)

Among various cases that equally admit of evidentialist reasoning, the supposedly evidentialist solution has varying degrees of intuitive attractiveness. I suggest that cooperative reasoning may account for the appeal of apparently evidentialist behavior in the cases in which it is intuitively attractive, while the inapplicability of cooperative reasoning may account for the unattractiveness of evidentialist behaviour in other cases. A collective causal power with respect to agreed outcomes, not evidentialist reasoning, makes cooperation attractive in the Prisoners' Dilemma. And a natural (...) though unwarranted assumption of such a power may account for the intuitive appeal of the one-box response in Newcomb's Problem. (shrink)

A number of authors, Including Thomas Schelling and David Lewis, have envisaged a model of the generation of action in coordination problems in which salience plays a crucial role. Empirical studies suggest that human subjects are likely to try for the salient combination of actions, a tendency leading to fortunate results. Does rationality dictate that one aim at the salient combination? Some have thought so, Thus proclaiming that salience is all that is needed to resolve coordination problems for agents who (...) are rational in the sense of game theory. I argue against this position; rational agents will not necessarily aim for the salient. It remains to explain how the salient comes to be chosen by human beings. Various possibilities are noted. One involves a mechanism invoked by Hume and Wittgenstein in other contexts: we may project an unreasoned compulsion onto reason, falsely believing that rationality dictates our choice of the salient. (shrink)

Philosophers using game-theoretical models of human interactions have, I argue, often overestimated what sheer rationality can achieve. (References are made to David Gauthier, David Lewis, and others.) In particular I argue that in coordination problems rational agents will not necessarily reach a unique outcome that is most preferred by all, nor a unique 'coordination equilibrium' (Lewis), nor a unique Nash equilibrium. Nor are things helped by the addition of a successful precedent, or by common knowledge of generally accepted personal principles. (...) Commitments like those generated by agreements may be necessary for rational expectations to arise. Social conventions, construed as group principles (following the analysis in my book On Social Facts), would suffice for this task. (shrink)

How is one to act so as to do as well as possible according to one’s ranking of the possible outcomes? How—as it may be put—is one to act rationally? Sometimes the possible outcomes are not under one’s own control: an outcome is a combination of one’s own and another agent’s action. Often, then, one must try to work out what the other agent will do, in order to do as well as possible in one’s own lights. It is situations (...) of this sort—situations of “strategic interaction”—that most concern the game theorist. (shrink)

In the days when the Great Central and the Midland ran competitive services from Leicester to London, I agreed to meet your train when you came up from Leicester. “It arrives at 12.5”, you said in your letter. But you neglected to mention which station, and only on the morning of your journey did each of us realize that this matter had been left open. You intended to travel from Leicester Central, it being more convenient for you than London Road, (...) and you supposed that I would be able to infer your intention by consulting Bradshaw, and noting a 12.5 arrival from Leicester at Marylebone. (shrink)

One of Hume's most well-known works and a masterpiece of philosophy, A Treatise of Human Nature is indubitably worth taking the time to read.

Analyzes the nature of international disagreements and conflict resolution in terms of game theory and non-zero-sum games.