[lbo-talk] game theory takes a Nobel

[Christian A. Gregory]

I think that the prisoner's dilemma (and a lot of game theory) is 
undervalued precisely because it's so widely assumed. It predicts that 
_rational_ persons, if they act even on the basis of their own payoffs and 
the (perfectly) known payoffs of others, can act contrary to their own 
interests.  With the benefit of repeated interaction or communication, 
strategies that are not optimal (ie collaboration, cooperation) can be made 
so. Although that seems obvious to us now, it wasn't always so--especially 
for economists.

I'm also reminded that, if  this really were so obvious, I would not 
constantly be so amazed that people still support W.  (cf. 
http://www.workingforchange.com/comic.cfm?itemid=19635)

Christian