Understanding Economics: Game Theory by Jay R. Corrigan

Understanding Economics: Game Theory by Jay R. Corrigan

Game Theory is something I hear about a lot, but don’t really understand. This set of Great Courses lectures was a great introduction to the topic. The first lectures take you through different game scenarios and teach you about human behavior when humans understand the consequences of their choices. The easiest was the classic “prisoners’ dilemma” in which the police catch two alleged criminals, take them into separate rooms, and interrogate them. If neither talks, they both go free. But if one talks and the other doesn’t, the talker gets a light prison sentence and the one who stayed quiet goes away for a long time. Corrigan shows why it is always in the prisoner’s interest to make the deal and “confess” (even if he or she is innocent).

 

These sorts of thought problems are fascinating and as they get more and more complex, Corrigan begins to apply them to the real world showing how to use game theory to make decisions. It gets very complicated very fast. If there is one weakness in what he described, it would seem to be that all sides have to know what is best for them or their actions will not be correctly anticipated, but the theory probably provides for that as well.