Discussion On Game Theory Of Economics And Morality - 1650 Words

Discussion On Game Theory Of Economics And Morality (Essay Sample) Content: NameInstructorCourseDateGame Theory and MoralityIntroductionGame theory is a term used in economics to describe the analysis of strategies used to deal with situations that are competitive, whereby the result of a contestants choice is solely dependent on the actions taken by the other contestants. Simply, game theory could be defined as analyzing the decision-making of a number of individuals who must make choices that end up affecting the interests of other involved parties. The players in such a game have to carefully decide on strategies to use simultaneously. Thus, the game theory is used to analyze and comprehend strategic situations, and the theoretical concepts of the game are only applicable if the actions of the participants are interdependent (Kim 1-3). On the other hand, morality, according to Hardin, refers to the standards distinguishing between right or wrong (Hardin 3). It could al so be referred to as ethics, which are values observed by a specific community on acceptable behavior. In the eyes of Charles Darwin, morality was a creation by human beings to curtail selfish practices that had naturally developed as adaptations (Katz 1).In mathematics, game theory is used to establish a relationship between reasoning and morality (Harsanyi n.pg). The two concepts are conflicting since rationality advocates for decisions that are beneficial to an individual, whereas morality emphasizes that an individual makes decisions with the interests of others at heart. In spite of the existing conflict between the two terminologies, the game theory advances ways in which they can be combined. It is expected that unlike animals, human beings, in their quest to access goods, will make sober decisions, think consciously and eventually enter a mutual agreement that will make them better placed to access items they need for survival. Thus, it is an assumption that human beings adopt internal ethical values, which work for the well-being of the community. However, this is not always the case. In fact, in real life situations, individuals analyze each others likely choices of strategy and even manipulate each other in making unbeneficial choices for personal gains.Morality in Game Theory StrategiesAccording to Binmore, the most commonly used illustration of game theory is the dilemma game. A good example of such dilemma is where two prisoners are locked up in separate cells and each is offered a chance to admit having committed a crime. If none of the suspects admits to the crime, they are set free and each get half the years they deserve to be in prison. In the case that one prisoner accepts to take the blame and one declines, the one that confesses is set free in exchange for testifying against the other one who ends up getting the full 10 years sentence. If both prisoners are to a dmit to the crimes then they are both found guilty and sentenced to a reduced term (Binmore 29).The dilemma game is a good representation of the interplay between morality and the strategies that one chooses in game theory. The two prisoners are given an opportunity to do the right thing or be selfish. The choices they make here are likely to affect their future interaction with each other and it is important they respond rationally to the opportunity. Though the choice of confessing easily presents itself to the prisoners, there is no guarantee that both prisoners will choose to confess. In the prisoners dilemma analyzed here, the participants are faced with choices that are meant to assist them learn the virtue of cooperation. Consequences for making the wrong choice are set to discourage either party from defection. However, the concept of morality being emphasized here is not clear. For example, if one of the prisoners was to disho nor the agreement and the other does not find out, the game theory in a way encourages him to get away with it. Another example is if one was to collect a wallet with no detection, the game theory would suggest the moral thing to do is keep it. This clearly indicates that it is possible to incorporate moral values in to the game theory, but the applicability varies depending on the theoretical analysis of the situation (Kim 8).Again, the moral concept is not enforceable as it is solely dependent on the choices that each of the participants makes. For instance, a company may choose to produce high quality products while other competing companies, with the same product, choose to produce low standard products. The moral value here is not necessarily enforced by the game theory. In such a case, it could be the companys strategy to dominate the market by keeping its customers happy.Morality depends solely on the nature and good will of an individual (MeÃŒ roÌ‹ n.pg.). For instance, one of the prisoners may decide to be selfish and pin the crime on the other. If it were to happen that the same situation was repeated, the other would in turn pin the crime on his counterparts, and this would be considered fair play. After subsequent experiences, the two learn the aspect of cooperation as it benefits both of them. Here, the game theory instills the principle of cooperation by ensuring that the selfish act of confessing brings about the worst results, though not entirely damaging.The game theory makes the assumption that the contestants are equally empowered such that they cannot be influenced into making choices they would have rather not made. The aspect of morality is compromised if the other player is not able to stand up to the threat as they become vulnerable. In case of such cases, where one side is empowered than the other, the situation changes and the less powerful player is forced to submit or defect. The sense of morality attributed to the game theory i n such a situation is that the dominating party is obligated to take advantage of the other as long as it is beneficial (Harsanyi n.pg.). Therefore, the concept of morality in the game theory has to do with making choices that will maximize the overall outcome for all players and not necessarily for a single individual.Incorporation of Moral Principles into the Game TheoryMoral principles refer to acceptable acts of conduct in a certain community. In the game theory, morality is imposed by a system of reward and consequences that are witnessed when an individual makes a choice in a given situation (Katz 3). Morality according to Darwin is the result of adaptation of human beings to the environment. Thus, human beings in competition for natural resources are forced to come up with rules to control the access of natural resources (3-5).There are limits to the scope in which the consequences of an action are calculated, meaning that not all outcomes can be calculated (Harding 5). Henc e, it is a great challenge to predict actions of people with different capacities because they are likely to deliver contradicting results and passing judgment will only be based on the participants level of intelligence rather than moral weakness or strength. However, there are limitations to an individuals capability to make decisions on what is good for another person, and this can only be determined by the participants themselves. Again, there are limitations that are brought about by our reasoning and the actions we take. Outcomes depend on the actions of others in order to manifest, thus morality comes in because it is all about how our actions affect other people.When it comes to life, the game theory provides a strategy in which an individual can maximize the fulfillment of needs in some situations. The concept of morality is lost in game theory where it is assumed that when it is possible for an entity to be successful by doing harm to another, then such an entity would act ually under obligation to do exactly that. Though other arguments advance that these situations are not in existence, what is clearly illustrated is that if such a scenario was to be witnessed, the dominating agent should inflict as much damage as possible. Moreover, even though a sense of morality is encouraged in the game theory, there is emphasis on choices that would generate maximum outcomes to benefit more people (Harsanyi n.pg.). The aspect of moral attributes has not been clearly identified, in that, the choice between what is good or bad is bound to change depending on the number of people the result will affect and depending on whether there was detection when an individual was making a decision (Hardin 9-11). Moral principles can be integrated in to the game theory and even enforced as long...