Game Theory and Ethics

Individualists claim that collective obligations are reducible to the individual obligations of the collective’s members. Collectivists deny this. We set out to discover who is right by way of a deontic logic of collective action that models collective actions, abilities, obligations, and their interrelations. On the basis of our formal analysis, we argue that when assessing the obligations of an individual agent, we need to distinguish individual obligations from member obligations. If a collective has a collective obligation to bring about (...) a particular state of affairs, then it might be that no individual in the collective has an individual obligation to bring about that state of affairs. What follows from a collective obligation is that each member of the collective has a member obligation to help ensure that the collective fulfills its collective obligation. In conclusion, we argue that our formal analysis supports collectivism. (shrink)

In Book III, Part 2 of the Treatise, Hume presents a natural history of justice. Self-interest clearly plays a central role in his account; our ancestors invented justice conventions, he maintains, for the sake of reciprocal advantage. But this is not what makes his approach so novel and attractive. Hume recognizes that prudential considerations are not sufficient to explain how human beings – with our propensities towards temporal discounting and free-riding – could have established conventions for social exchange and collective (...) action in commercial societies. This leads him to develop an innovative account of the role that emotional aversions play in establishing trust between strategically rational agents. (shrink)

In the Groundwork, Immanuel Kant famously argued that it would be self-defeating for everyone to follow a maxim of lying whenever it is to his or her advantage. In his recent book Signals, Brian Skyrms claims that Kant was wrong about the impossibility of universal deception. Skyrms argues that there are Lewisian signaling games in which the sender always sends a signal that deceives the receiver. I show here that these purportedly deceptive signals simply fail to make the receiver as (...) epistemically well off as she could have been. Since the receiver is not actually misled, Kant would not have considered these games to be examples of deception, much less universal deception. However, I argue that there is an important sense of deception, endorsed by Roderick Chisholm and Thomas Feehan in their seminal work on the topic, under which Skyrms has shown that universal deception is possible. (shrink)

In large, impersonal moral orders many of us wish to maintain good will toward our fellow citizens only if we are reasonably sure they will maintain good will toward us. The mutual maintaining of good will, then, requires that we somehow communicate our intentions to one another. But how do we actually do this? The current paper argues that when we engage in moral responsibility practices—that is, when we express our reactive attitudes by blaming, praising, and resenting—we communicate a desire (...) to maintain good will to those in the community we are imbedded in. Participating in such practices alone will not get the job done, though, for expressions of our reactive attitudes are often what economists call cheap talk. But when we praise and blame in cases of moral diversity, expressions of our reactive attitudes act as costly signals capable of solving our social dilemma. (shrink)

It would be unkind but not inaccurate to say that most experimental philosophy is just psychology with worse methods and better theories. In Experimental Ethics: Towards an Empirical Moral Philosophy, Christoph Luetge, Hannes Rusch, and Matthias Uhl set out to make this comparison less invidious and more flattering. Their book has 16 chapters, organized into five sections and bookended by the editors’ own introduction and prospectus. Contributors hail from four countries (Germany, USA, Spain, and the United Kingdom) and five disciplines (...) (philosophy, psychology, cognitive science, economics, and sociology). While the chapters are of mixed quality and originality, there are several fine contributions to the field. These especially include Stephan Wolf and Alexander Lenger’s sophisticated attempt to operationalize the Rawlsian notion of a veil of ignorance, Nina Strohminger et al.’s survey of the methods available to experimental ethicists for studying implicit morality, Fernando Aguiar et al.’s exploration of the possibility of operationalizing reflective equilibrium in the lab, and Nikil Mukerji’s careful defusing of three debunking arguments about the reliability of philosophical intuitions. (shrink)

Although trust and reciprocity are ubiquitous in social exchange, their neurobiological substrate remains largely unknown. Here, we investigated the effect of damage to the ventromedial prefrontal cortex (vmPFC)—a brain region critical for valuing social information—on individuals’ decisions in a trust game and in a risk game. In the trust game, one player, the investor, is endowed with a sum of money, which she can keep or invest. The amount she decides to invest is tripled and sent to the other player, (...) the trustee, who then decides what fraction to return to the investor. In separate runs, ten patients with focal bilateral damage to the vmPFC and control participants made decision while playing in the role of either investor or trustee with different anonymous counterparts in each run. A risk game was also included in which the investor faced exactly the same decisions as in the trust game, but a random device (i.e., a computer), not another player, determined the final payoffs. Results showed that vmPFC patients’ investments were not modulated by the type of opponent player (e.g., human vs. computer) present in the environment. Thus, vmPFC patients showed comparable risk-taking preferences both in social (trust game) and nonsocial (risk game) contexts. In stark contrast, control participants were less willing to take risk and invest when they believed that they were interacting with people than a computer. Furthermore, when acted as trustee, vmPFC patients made lower back transfers toward investors, thereby showing less reciprocity behavior. Taken together, these results indicate that social valuation and emotion subserved by vmPFC have a critical role in trusting and reciprocity decisions. The present findings support the hypothesis that vmPFC damage may impair affective systems specifically designed for mediating social transaction with other individuals. (shrink)

If group members aim to fulfill a collective obligation, they must act in such a way that the composition of their individual actions amounts to a group action that fulfills the collective obligation. We study a strong sense of joint action in which the members of a group design and then publicly adopt a group plan that coordinates the individual actions of the group members. We characterize the conditions under which a group plan successfully coordinates the group members' individual actions, (...) and study how the public adoption of a plan changes the context in which individual agents make a decision about what to do. (shrink)

Game theorists tend to model climate negotiations as a so-called ‘tragedy of the commons’. This is rather worrisome, since the conditions under which such commons problems have historically been solved are almost entirely absent in the case of international greenhouse gas emissions. In this paper, I will argue that the predictive accuracy of the tragedy model might not stem from the model’s inherent match with reality but rather from the model’s ability to make self-fulfilling predictions. I then sketch some possible (...) ways to dispel the tragedy, including (1) recognizing some ways the assumptions of the model fail, (2) taking seriously recent work suggesting that increasing greenhouse gas emissions is not in most nations’ own self-interest, and (3) preferring alternative models like collective risk dilemmas, bargaining games, or cooperative models. (shrink)

A descriptive norm is a behavioral rule that individuals follow when their empirical expectations of others following the same rule are met. We aim to provide an account of the emergence of descriptive norms by first looking at a simple case, that of the standing ovation. We examine the structure of a standing ovation, and show it can be generalized to describe the emergence of a wide range of descriptive norms.

For contractarians, justice is the result of a rational bargain. The goal is to show that the rules of justice are consistent with rationality. The two most important bargaining theories of justice are David Gauthier’s and those that use the Nash’s bargaining solution. I argue that both of these approaches are fatally undermined by their reliance on a symmetry condition. Symmetry is a substantive constraint, not an implication of rationality. I argue that using symmetry to generate uniqueness undermines the goal (...) of bargaining theories of justice. (shrink)

Is the minimum wage ethically justifiable? In this chapter, we attempt to answer this question from an order-ethical perspective. To this end, we develop two simple game theoretical models for different types of labour markets and derive policy implications from an order-ethical viewpoint. Our investigation yields a twofold conclusion. Firstly, order ethicists should prefer a tax-funded wage subsidy over minimum wages, if they assume that labour markets are perfectly competitive. Secondly, order ethics suggests that the minimum wage can be ethically (...) justified if employers have monopsony power in the wage setting process. As it turns out, then, order ethics neither favours nor disfavours the minimum wage. Rather, it implies conditions under which this form of labour market regulation is justified and, hence, allows empirical science to play a great role in answering the ethical questions that arise in the context of the minimum wage debate. This illustrates one of order ethics’ strengths, viz. the fact that it tends to de-ideologize the debate about ethical issues. (shrink)

Economic concepts and methods are used to throw light on some aspects of common-sense ethics and the difference between it and Utilitarianism. (1) Very few exceptions are allowed to the rules of common-sense ethics, because of the cost of information required to justify an exception to Conscience and to other people. No such stringency characterizes Utilitarianism, an abstract system constructed by philosophers. (2) Rule Utilitarianism is neither consistent with common-sense ethics, nor does it maximize utility as has been claimed for (...) it. The same is true of more recent variants of Utilitarianism. (3) Second best and first best are usually identical in common-sense ethics. They are often identical in Utilitarianism when a moral situation can be represented by a Prisoner's Dilemma. However, problems arise in permissive forms of Utilitarianism when it is not obvious that second best should be applied. (shrink)

Professions are granted autonomy by society, to regulate their own affairs. In return for the economic benefits autonomy grants to professions, society expects professions to act in a socially responsible manner. This paper presents a game-theoretic analysis of the relationship between society and professions, which shows that the relationship is unstable in the face of opportunities for professions to renege on the social contract. It also shows how periodic controversies regarding the degree to which professionals act in the public interest (...) are expected to occur periodically, and how they are resolved. (shrink)

Fifty years ago, two Princeton professors established game theory as an important new branch of applied mathematics. Gametheory has become a celebrated discipline in its own right, and it now plays a prestigious role in many disciplines, including ethics,due in particular to the neo-Hobbesian thinking of David Gauthier and others. Now it is perched at the edge of business ethics. I believethat it is dangerous and demeaning. It makes us look the wrong way at business, reinforcing a destructive obsession with (...) measurableoutcomes and a false sense of competition. It falsely characterizes or insidiously advocates a style of human behavior that is utterlyunacceptable. To put the matter quite crudely, a person who actually practiced the form of "rationality" advocated by game theory wouldbe something of a monster. (shrink)

This paper uses the intuition from the game of chickento model client-auditor financial reporting and audit effort strategies. Within an ethical context, our model is concerned with the client misreporting and its detection by the auditor. The paper uses a welfare game(similar to the game of chicken) to more formally model client-auditor strategies. The welfare game is then extended to provide additional insight into ethical and audit effort issues.Such a welfare gameprovides equilibrium in mixed strategies. This mixed strategy solution makes (...) possible four outcomes from the game: 1) Financial Statements are fairly presented by client and the auditor performs a normal audit, 2) Financial Statements are fairly presented by client and the auditor performs an extended audit (over auditing), 3) Financial State-ments are misstated by client and detected by the auditor, and 4) Financial Statements are misstated by client and not detected by the auditor (audit failure despite no intended unethical action on the part of the auditor). (shrink)

This paper provides an overview of developments in the application of game theory to moral philosophy. Game theory has been used in moral theory in three ways. First, as a tool to analyze the function of moral norms. Secondly, to characterize bargaining about moral norms. Thirdly, the paper demonstrates how game theory can make sense of the authority of moral norms in a way that renders the concept suitable for further analysis.

Applications of game theory to moral philosophy are impededby foundational issues and troublesome examples. In the first part of this paper,questions are raised about the appropriate game-theoretical frameworks for applications to moralphilosophy and about the proper interpretations of the theoretical devices employed inthese frameworks. In the second part, five examples that should be of particular interest to thoseinterested in the connections between ethics and game theory are delineated and discussed. Thefirst example comprises games in which there is an outcome unanimously (...) preferred to the``solution'' of the game, appropriately defined. The second comprises games whose solution callsfor different players to employ different strategies. The third comprises games whosesolution calls for players to adopt mixed strategies. The fourth comprises games whose solutionrequires players to cycle among a variety of strategies. The fifth comprises games whose solutionrequires players to discriminate in morally inappropriate ways. (shrink)

Book Information The Importance of Being Understood: Folk Psychology as Ethics. The Importance of Being Understood: Folk Psychology as Ethics Adam Morton , London; New York: Routledge , 2002 , 240 , US$95 ( cloth ), US$29.95 ( paper ) By Adam Morton. London; New York: Routledge. Pp. 240. US$95 (cloth:), US$29.95 (paper:).

Morality for the purposes of this paper consists of sets of rules or principles intended for the general regulation of conduct for all. Intuitionist accounts of morality are rejected as making reasoned analysis of morals impossible. In many interactions, there is partial conflict and partial cooperation. From the general social point of view, the rational thing to propose is that we steer clear of conflict and promote cooperation. This is what it is rational to propose to reinforce, and to assist (...) in reinforcing in society; it is not necessarily what it is individually rational to do. Even so, given the general situation, the rationality of its reinforcement will typically support the rationality of individual action as well. Game theory makes it possible to clarify these interactions, and these proposals for social solutions. (shrink)

In evolutionary models of indirect reciprocity, reputation mechanisms can stabilize cooperation even in severe cooperation problems like the prisoner’s dilemma. Under certain circumstances, conditionally cooperative strategies, which cooperate iff their partner has a good reputation, cannot be invaded by any other strategy that conditions behavior only on own and partner reputation. The first point of this paper is to show that an evolutionary version of backward induction can lead to a breakdown of this kind of indirectly reciprocal cooperation. Backward induction, (...) however, requires strategies that count and then cease to cooperate in the last, last but one, last but two, … game they play. These strategies are unlikely to exist in natural settings. We then present two new findings. (1) Surprisingly, the same kind of breakdown is also possible without counting. Strategies using rare golden opportunities for defection can invade conditional cooperators. This can create further golden opportunities, inviting the next wave of opportunists, and so on, until cooperation breaks down completely. (2) Cooperation can be stabilized against these opportunists, by letting an individual’s initial reputation be inherited from that individual’s parent. This ‘inclusive reputation’ mechanism can cope with any observably opportunistic strategy. Offspring of opportunists who successfully exploited a conditional cooperator cannot repeat their parents’ success because they inherit a bad reputation, which forewarns conditional cooperators in later generations. (shrink)

Bluffing is essentially nothing more than a type of deception. But, despite its morally questionable foundation, it is not only permissible in certain contexts, but sometimes encouraged and/or required (e.g., playing poker). Yet, the question remains as to whether it is permissible to bluff in other contexts – particularly everyday situations. In this paper, I look at László Mérő’s argument – one based in game theory and Kantian ethics – to the end that bluffing is morally permissible in everyday contexts. (...) I argue that Mérő’s argument is mistaken on two grounds. First, it includes an epistemic feature (i.e., knowledge that bluffing is part of the game) that is lacking in everyday contexts. Second, even if we add a proviso to solve this epistemic problem, the resulting strategies fail to guarantee an equilibrium state. Thus, I hope to show that Mérő’s attempt to justify the use of bluffing in everyday contexts fails. (shrink)

Chamberlin insists on its validity in contributing to our thinking about the place of ethics in international affairs and in clarifying both the dangers and potential areas of cooperation inherent in many international relationships.

Why do people stay together in monogamous relationships? Love? Fear? Habit? Ethics? Integrity? Desperation? In this paper I will consider a rather surprising answer that comes from mathematics. It turns out that cooperative behaviour, such as mutually-faithful marriages, can be given a firm basis in a mathematical theory known as game theory. I will suggest that faithfulness in relationships is fully accounted for by narrow self interest in the appropriate game theory setting. This is a surprising answer because faithful behaviour (...) is usually thought to involve love, ethics, and caring about the well being of your partner. It seems that the game-theory account of faithfulness has no need for such romantic notions. I will consider the philosophical upshot of the game-theoretic answer and see if it really does deliver what is required. Does the game-theoretic answer miss what is important about faithful relationships or does it help us get to the heart of the matter? Before we start looking at lasting, faithful relationships, though, let’s get a feel for how mathematics might be employed to help in matters of the heart. Let’s first consider how mathematics might shed light on dating to find a suitable partner. (shrink)

Game theory is the systematic study of interdependent rational choice. It should be distinguished from decision theory, the systematic study of individual (practical and epistemic) choice in parametric contexts (i.e., where the agent is choosing or deliberating independently of other agents). Decision theory has several applications to ethics (see Dreier 2004; Mele and Rawlings 2004). Game theory may be used to explain, to predict, and to evaluate human behavior in contexts where the outcome of action depends on what several agents (...) choose to do and where their choices depend on what others choose to do. (See the entry on game theory) Game theory consequently is relevant to ethics, and it is used in moral and political philosophy in a variety of ways. We shall concentrate on the influence and use of game theory in ethics and those parts of political theory involving norms or principles of justice, ignoring questions about political and legal institutions on the one hand and questions about issues dealing with moral virtues on the other. (shrink)