Rational Conflict.

• Author: Polacheck, Solomon W.

This is a philosophical book about economic methodology primarily dealing with the "rationality" of game theoretic models particularly as applied to conflict. Rationality is defined as "the ability to submit |one's~ options to the critical assessment of Reason,"--a type cognitive process "that requires no understanding of the thought process of other human beings." Conflict is defined to be any instance in which agents intentionally destroy assets to promote their own interests. It includes such "antisocial" behavior as war which destroys natural resources, and worker strike activity which diminishes production and depletes economic resources. The primary question is whether neoclassical game theoretic approaches (e.g., Brams |1~, Myerson |2~, Rapoport |3; 4~) are capable of "rationally" analyzing conflict. The book argues they are not and provides some suggestions for improvement.

After a two chapter introduction (Part I), the first laying out the issues and the second illustrating them by way of Greek mythology, the book is essentially divided into two additional parts. One (Part II) is a four chapter survey of game theory's intricacies as applied to conflict. It concludes with a chapter describing how game theory attains equilibria by assumption instead of Reason, which the author claims is faulty logic. Part III attempts to provide some fixes.

Assuming one believes in learning by doing, Part II serves as a game theory primer emphasizing game theory's assumptions and again referring back to examples from Greek mythology such as Prometheus's deliverance of fire to humanity in defiance of Zeus to whom he was previously loyal. It is divided into four chapters. Among others Chapter 3 deals with prisoner's dilemma, the game which illustrates how paradoxically rationality can lead to conflict, making both parties worse off than if somehow they could cooperate which in reality they individually prefer. Only with an all powerful "Titanic Leviathan" restricting both parties to behave cooperatively can peace come about--hence the famous Hobbsian Leviathan trap. But imposing peace as such is beyond game theory. This is an example of irrationality. Even more complicated sequential games (Chapter 4) don't alter the story: "War is what happens when agents skillfully set and reset control variables in a struggle to survive the jungle of antagonistic objective functions."

On the other hand whereas in non-cooperative games there is no room for...