Thursday, December 18, 2008

Game theory - Yale online course review

Many academic institutions in the Anglo-Saxon world are putting lectures and lecture series on line for listening or, occasionally, viewing. Most of these come as podcasts, through iTunes-U or independently, however a few are available for download without any RSS feed whatsoever. An example are all the courses that Yale offers. Those are many and of great quality.

In this review I'd like to pay attention to the course in Game Theory that is served as an economics course, but basically is a math subject and has implications beyond math and economics. The lectures can be downloaded or followed on-line as audio as well as video. (Game Theory audio and video) The course involves a reasonable amount of mathematics, but the complexity of this is very low. Professor Ben Polak makes a point of putting the lessons of Game Theory in natural language and is very effective in showing the application in practical terms with examples from economics, politics and even soccer and dating. Aside from being very clear, Professor Polak is also very entertaining.

My excitement just came to a high point during the 8th lecture when Polak showed an important implication for the social sciences, where I immediately saw it profoundly important for sociology of law - my old field of specialty.

Suppose you see in mixed societies that people generally live in segregated cities or quarters. And you also see that when given the choice where to live, they will move into the areas where the people of their own kind live. Can you conclude from this that people generally prefer to live segregated? Game Theory shows that the answer is no. If people prefer to live in mixed towns, but rather not be part of a minority, their strategic choices will result in segregation. In more broad terms this means that if you see people act according to a certain pattern, this does not necessarily imply this is their preferred pattern, but rather it could be the result of a strategic choice, aiming to optimize the result, in stead of gambling to get to a maximum.

The is especially important for social sciences that attempt to make observations about normative rules, such as the sociology of law. It is sort of generally accepted that if a rule is not abided by, it may legally be a rule, but sociologists do not consider it a social norm. With the game theory lesson in mind, this may be false. Social actors can choose to break the rule for strategic reasons, but on the normative level still accept the validity of the rule. It makes the social scientific, empirical, approach of normative fields all the more complicated.

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