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A Beautiful Mind

Game Theory

Posted on 2012.11.03 at 00:00
Current Location: 67114
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I apply, or attempt to apply, the Nash Equilibrium to my everyday life, in every interaction. Its become a sort of philosophy for me. "Altruistic objectivism" if you will, as I don't subscribe wholly to any singular thread of philosophical debate - I don't have to - the best of many in an ever evolving comprehension of life far outweighs the limits imposed upon any single ideal.

Hiroshi Mikitani, CEO of Rakuten Inc. recently posted,

There is no such thing as common sense.

In fact, the only real truth in business is that all ideas are relative. Every manner of thinking has some strong points and some weak points. Nothing is ever set in stone. This is the nature of our world.

What’s important, therefore, is to progress forward while constantly adapting to new situations...Nothing is ever finished or fixed. Therefore, no one can ever declare his or her idea absolutely right. There is no absolute. Only the evolution of ideas.

Be suspicious of common sense and those who cite it to convince you to avoid progress. Do not fear going against common sense. Ideas evolve while being constantly adapted.

It dawned on me quite suddenly that Nash's equilibrium is, in essence, a practical application of Lawrence Kohlberg's third-tier of his Development of Moral Reasoning. Simply pointing out that learning to balance your own needs along with the needs of others as a postconventional value can be seemingly elusive and without form, but when coupled with making one's best response to the actions of the other players who are also [rationally] vested in a holistic solution both individually and collectively, then you have a workable, teachable, repeatable theory.

Adam Smith said the best result comes from everyone in the group doing what's best for himself, right? That's what he said, right? Incomplete. Incomplete! Because the best result would come from everyone in the group doing what's best for himself AND the group. Governing dynamics, gentlemen, governing dynamics. Adam Smith, was wrong!

The vernacular used here gave me pause to additionally consider the practical application of postconventional values in accordance with integrative bargaining over compromise; which at first glance utilizes the Nash principle, leading me to believe all conflict can be resolved through those who practice postconventional behavior. Again, rationality is stressed, for any sub-optimal decision by a "player" ends up hurting everyone, including themselves, in order to "win." When winning in the game of life is perceived as everyone finishing in first place over any single individual, our own personal accomplishment will mean that much more, and that's an ideology I can support. Fulfillment can only be reached by giving of oneself. It will never, ever come, by individual "winning."

Concisely, the Nash Equilibrium is a practical application of Kohlberg's postconventional values in the Development of Moral Reasoning which is integral to conflict resolution.


michelle1963 at 2012-11-03 14:35 (UTC) (Link)

Without knowing it, I have operated by the Nash principle all of my adult life. I never consider anything a win for me, unless the other players (family members, friends, co-workers) come away satisfied too. Easy to accomplish if all players operate similarly.

I have found the rub comes when a member or members of the group prefer to win at the expense of everyone else. In the past, my failure to recognize such thinking has led me to try to come up with new ideas, compromise further, etc., never understanding that nothing but complete capitulation to his or her point of view will be satisfactory, and wondering why reaching mutual agreement is so unnecessarily difficult.

Life is a good, if harsh teacher. I recognize these individuals quickly now and avoid them like the plague. They will destroy everything to get their way and never realize they have lost everything at their own hand.

Anyway, excellent melding of the Nash principle of economics with Kohlberg's philosophy of moral development! Fantastic!

ehowton at 2012-11-04 23:38 (UTC) (Link)
Thanks. I was trolling some philosophical forums where I saw many (probably very young) individuals anonymously admitting to feigning an interest in mutual understanding just to hear the words, "I can see your point of view" while remaining entirely close-minded to the other perspective.
michelle1963 at 2012-11-05 00:43 (UTC) (Link)
The close-minded must have conflict-infested lives. But at least they have faith in their inherent "rightness." Hopefully, that keeps them warm at night.
dentin at 2012-11-04 21:53 (UTC) (Link)
I have probably posted on this elsewhere, but I've been living by the idea that I'm entirely out for myself. My optimization function is purely selfish.

However, the result of that purely selfish function is what appears to be a morally upstanding, contributing citizen.

The only difference between me and a crack whore thug on the street is timescale. The thug thinks in terms of the next ten minutes, the next day, possibly the next week. I think in terms of 50 years. In my mind, I feel the cold hand of death at my throat, every day - at the age of 39 years old, because I think on decade long timescales.

When you start to average out the results of your decisions over long periods, you run into issues of "by doing this I hinder society, and if society sucks then my life will suck". You have to take into account that having awesome people around you, having resources to be awesome, and having society suck less is better than not.

In short, people are altruistic and cooperative because there's an actual net gain to be had. Selfish behaviour over a long enough time frame can produce cooperation by default. It's kinda neat.
ehowton at 2012-11-04 23:33 (UTC) (Link)
I love the way you think. You've concisely defined my "altruistic objectivism" phrase above in the most beautiful and articulate way possible. Thank you!
dentin at 2012-11-05 01:45 (UTC) (Link)
Plus, I'm a master of drive-by commenting!
ehowton at 2012-11-06 19:22 (UTC) (Link)
I do often crave your insight. So many things I miss thinking alone.
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