Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Chapter 24: Game Theory

Ken Binmore

Subjects: economics and finance, behavioural and experimental economics, history of economic thought


Ken Binmore Introduction Game theory is sometimes dismissed as an instrument of evil designed to help selfish people exploit their power. However, game theorists believe their subject is ethically neutral. Like logic or mathematics, it can be used on either side of any dispute. When game theorists say what follows from what in a game, they no more offer a value judgement than a mathematician who asserts that 2 1 2 5 4. This brief chapter can only touch on how game theory can be used in ethics, much as mathematics is used in physics. My books Natural Justice (2005b) and Game Theory and the Social Contract (1994, 1998) offer a more comprehensive overview. Toy games Game theorists follow John von Neumann in making a virtue out of using the language of parlour games like chess or poker. People are usually able to think dispassionately about the strategic issues that arise in such games without throwing their hands up in horror if the logic leads to an unwelcome destination. But logic is the same whatever the context in which it is applied. The same principle applies to the toy games that game theorists use as examples. It is sometimes said that the world is too complicated to be captured by such simple models, but who learned to solve complicated problems without solving simple problems first? The Stag Hunt To illustrate his social contract theory, Jean-Jacques Rousseau ([1762] 1913) tells a story of two hunters, whom I call Adam and Eve....

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