Economic Games People Play
by Shlomo & Sharone Laital

   This is not so much a review as a quick compilation of the notes I made while reading 'Economic Games People Play'. The main thing I got out of the book was that the unrealized assumptions underlying many economic theories have their roots in questionable psychological understandings.
   PRISONER'S DILEMMA. Consider 2 people under suspicion for a crime that they did commit. They are interrogated separately from each other. They can't align their strategies. If both refuse to give evidence, they both go free. If one talks, the other goes to prison for a stiff term and the squealer gets a light sentence for turning state's evidence.
   How much do they trust each other not to talk? What should each one do? What would you do? Here, the perception of what another might do affects your action. How accurate are your perceptions? How accurate are the other person's perceptions?
   DOUBLE BIND. This is two PRISON Dilemmas interlocked. An example follows.


   SITUATION: A tired mother is bothered by her child.
   HER REACTION: She tells him to go to bed, because he needs his sleep - instead of telling him to stop bothering her.
   ANALYSIS:She's trying to cover her annoyance by expressing concern for his needs. She's afraid her personal annoyance means she a less worthwhile parent.
   CHILD'S CHOICES: 1) He may go to bed. His mother feels somewhat disturbed because she has punished the child for her own annoyance with him. So she doesn't feel happier towards him. 2) He may refuse. The mother will see this as challenging her authority. Either way the child acts, the mother will have disagreeable feelings towards the child.
   LONG TERM BEHAVIOR: If this type of behavior is habitual from the mother, the consequences can be grave. Since there is no right way for the child to act (in this false situation), his behavior will tend to 1) Escape from mother. Leave home. Run away. Go to friends and neighbors excessively. 2) Behave erratically and randomly, because there is no logical way to action around the mother. This is pathological. 3) Behave exceedingly cautiously about committing to any behavior or choice. Can be a cause of decidophobia. This is also pathological.





Book Notes
Copyright 2005