Schelling's Game Theory: How to Make Decisions

305 Pages·2012·1.186 MB·English

by  Robert V. Dodge

Schelling’s Game Th eory

Schelling’s Game Th eory
How to Make Decisions
ROBERT V. DODGE
1
1
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Library of Congress Cataloging-in-Publication Data
Dodge, Robert, 1945-
Schelling’s game theory : how to make decisions / Robert V. Dodge.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-19-985720-3 (cloth : alk. paper)
1. Schelling, Th omas C., 1921- 2. Economists–United States–Biography. 3. Political scientists–
United States–Biography. 4. Nobel Prize winners–United States–Biography. 5. Game theory.
I. Title.
HB119.S28D628 2012
330.092–dc23
[B]
2011018453
9 8 7 6 5 4 3 2 1
Printed in the United States of America
on acid-free paper
For Pat Stocker, sister and friend
CONTENTS
Acknowledgments ix
Foreword by Th omas C. Schelling xi
1. Th omas Schelling and His Signature Course
CHAPTER
on Strategic Th inking
1
THE SCHELLING APPROACH TO STRATEGIC
PART I
THINKING AND DECISIONMAKING
7
2. Introduction to Strategic Th ought
CHAPTER 9
3. Vicarious Th inking
CHAPTER 13
4. Game Th eory
CHAPTER 29
5. Th e Two-By-Two Matrix
CHAPTER 44
STRATEGIES AND TACTICS
PART II 63
6. Strategies Defi ned and Illustrated
CHAPTER 65
7. Tactics
CHAPTER 79
8. Self-Command
CHAPTER 94
Contents vii
MODELS AS METAPHORS FOR
PART III
WHAT DECISIONS DO
99
9. Interaction Models
CHAPTER 101
10. Th e Dollar Auction
CHAPTER 114
11. Musical Chairs and Inescapable Mathematics
CHAPTER 123
THE PRISONER’S DILEMMA, COMPETITION,
PART IV
AND COOPERATION
135
12. Th e Prisoner’s Dilemma
CHAPTER 137
13. Cooperation
CHAPTER 147
14. Coordination
CHAPTER 157
INDIVIDUAL DECISIONS AND GROUP
PART V
AGREEMENT
167
15. Collective Choice and Voting
CHAPTER 169
16. Th e Commons and Fair Division
CHAPTER 188
17. Case Study: Overcoming Professional Basketball’s
CHAPTER
Commons Dilemma
202
DECISIONS THAT MIX AND SORT POPULATIONS,
PART VI
DECISIONS BASED ON RANDOMIZATION
217
18. Critical Mass and Tipping
CHAPTER 219
19. Individual Decisions and Group Outcomes
CHAPTER 230
20. Randomization in Decision-Making
CHAPTER 243
viii Contents
CASE STUDY AND REVIEW
PART VII 257
21. Case Study: Th e Cuban Missile Crisis:
CHAPTER
Analysis and Review
259
Index 287
ACKNOWLEDGMENTS
I would like to express my gratitude to Th omas Schelling for making available
personal materials for me to use in the preparation of this book and for his con-
tinued support. Special thanks goes to my longtime friend, Alice Olson, for the
considerable amount of time she put in reading and editing drafts of the manu-
script before it was submitted for publication. My gratitude is expressed to the
many notable people who allowed me to include their work and who contributed
original work to illuminate the ideas included in this book. Th anks to Catherine
Rae and Terry Vaughn at Oxford University Press for bringing this to the public
and Molly Morrison of Newgen for her technical skills.