This page is for information shared with students of my OLLI course, Human Rationality, Cooperation, and Choice.
Here are some materials that I have shared in lectures. They include PDF versions of the lecture slides, PDFs of the ‘scratch work’ notes I create during lecture, and maybe some other stuff.
- Lecture notes from 29 April. A PDF of the lectures notes can be downloaded here.
- Lecture notes from 22 April. A PDF of the lectures notes can be downloaded here. The scratchwork can be downloaded here.
- Lecture notes from 15 April. A PDF of the lectures notes can be downloaded here. The scratchwork can be downloaded here. Student mid-course feedback is here.
- Lecture notes from 8 April. A PDF of the lectures notes can be downloaded here. The scratchwork can be downloaded here.
Here is a collection of readings that some might find interesting. These are for educational use only.
- Gary Becker. “The Economic Approach to Human Behavior.” Online.
Here are a list of references I’ve used to develop material for the course. Where available, links are given to the Amazon page for the book. (I get no personal benefit from the links and provide them for ease of reference for those interested.)
- Paul L. Heyne, Peter J. Boettke, and David Prychitco. The Economic Way of Thinking. Pearson. 2013. Amazon.
- Phillip D. Straffin. Game Theory and Strategy. American Mathematical Society. 1993. Amazon.
- Robert Axelrod. The Evolution of Cooperation. Basic Books. 1984. Amazon.
- William Poundstone. Prisoner’s Dilemma. Doubleday. 1992. Amazon.
- Robert Wright. Non-zero: the Logic of Human Destiny. Pantheon. 1999. Amazon.
- Steven E. Landsburg. The Armchair Economist: Economics and Everyday Life. Free Press. 1993. Amazon.
- John Kay. “Economists: there is no such thing as the ‘economic approach’”. The Financial Times. Web page.
- Gary Becker’s Nobel Lecture, “The Economic Way of Looking at Behavior”. Online.
NOTE: On the last class meeting, I recommended Poundstone’s Prisoner’s Dilemma as excellent and fun summer reading.
Questions & Answers
Here are some questions that were asked in class. I’ve taken a stab at answering them.
Q: What are some modern examples of a TIT-FOR-TAT strategy?
A: A TIT-FOR-TAT strategy happens in the context of a situation that can be described as a Prisoner’s Dilemma. Advertising spending of two competing companies is an example of a Prisoner’s Dilemma (lifted from Wikipedia).
Advertising is sometimes cited as a real-example of the prisoner’s dilemma. When cigarette advertising was legal in the United States, competing cigarette manufacturers had to decide how much money to spend on advertising. The effectiveness of Firm A’s advertising was partially determined by the advertising conducted by Firm B. Likewise, the profit derived from advertising for Firm B is affected by the advertising conducted by Firm A. If both Firm A and Firm B chose to advertise during a given period, then the advertising cancels out, receipts remain constant, and expenses increase due to the cost of advertising. Both firms would benefit from a reduction in advertising. However, should Firm B choose not to advertise, Firm A could benefit greatly by advertising. Nevertheless, the optimal amount of advertising by one firm depends on how much advertising the other undertakeshttps://en.wikipedia.org/wiki/Prisoner%27s_dilemma#Real-life_examples
A TIT-FOR-TAT strategy employed by a company in the Prisoner’s Dilemma might look like this:
If my competitor didn’t not spend much on advertising last quarter, I am going to reduce my advertising expenditures this quarter. If they did spend a reasonable amount on advertising last quarter, I will maintain my advertising budget at a reasonable amount this quarter.
Doping in sports is another example of a Prisoner’s Dilemma. Here’s what Wikipedia says about this.
Two competing athletes have the option to use an illegal and/or dangerous drug to boost their performance. If neither athlete takes the drug, then neither gains an advantage. If only one does, then that athlete gains a significant advantage over their competitor, reduced by the legal and/or medical dangers of having taken the drug. If both athletes take the drug, however, the benefits cancel out and only the dangers remain, putting them both in a worse position than if neither had used doping.https://en.wikipedia.org/wiki/Prisoner%27s_dilemma#Real-life_examples
A TIT-FOR-TAT strategy in this Prisoner’s Dilemma would be to choose to dope in the next race if your opponent doped in the previous race. If you competitor did not dope in the last race, you won’t dope in this race.
The nuclear arms race can be seen as a Prisoner’s Dilemma. Two countries who are in conflict and who are tempted to increase the size of their arsenal can either build more nukes or act against temptation and not build nukes (hold their inventory constant or reduce it). If both countries increase their nuclear arsenal, they both benefit marginally from having more weapons, but they increase international (and domestic) tension. If neither increase their arsenal, then both can spend their resources on other efforts and their citizens relax a bit. If one country increases their arsenal and the other does not, then the country that does not is more vulnerable to damage should war break out (and more vulnerable to the threat of war).
A TIT-FOR-TAT strategy in this Prisoner’s Dilemma would be to choose not to grow your arsenal this year if your opponent did not grow their arsenal last year. You would grow your arsenal this year if your opponent grew their arsenal last year.