Game, But Can It Be a Theory?

Trying to decode the Indian mind will take more than game theory. Even so, the effort takes us through our oddities

Robert aumann won the nobel prize in Economics in 2005 and he is an economist Professor Raghunathan refers to, in passing. All theoretical economists have imbibed game theoretic approaches. However, Nobel Prizes for direct work in game theory are those awarded to John Harsanyi, John Nash and Reinhard Selten (1994) and Robert Aumann and Thomas Schelling (2005). I once heard Bob Aumann speak at a seminar and he said that being a mathematical economist was tough. If you used mathematics and arrived at an obvious conclusion, people wondered why you needed all the symbols to deduce something that was common sense. And if you arrived at a conclusion that wasn’t obvious, people argued there must be something wrong with the mathematics.

This is a book not just on applied game theory (applied in the Indian context), but it also seeks to explain Indian characteristics of selfishness, lack of cooperation, penchant for corruption and disdain for public property (including common resources) and rule of law. Such issues are important, underlined also in the Foreword by Narayana Murthy, and impact on what broadly may be called good governance. But they are also complicated socio-economic phenomena. An attempt to seek answers through very simple models based on game theory and behavioural economics is doomed to fail.

Hence, notwithstanding the Aumann remark, we arrive at the very facile conclusion that Indians lack self-regulation. Game theory (the name originates from initial analysis of parlour games) can be applied to any situation where there is strategic inter-dependence, with the pay-off to me depending not just on what I do, but on what others do. Since John von Neumann and Oskar Morgenstern’s influential Theory of Games and Economic Behaviour was published in 1944, game theory has developed a rich corpus, with the taxonomy of games based on number of players (2 persons, more than 2), availability of information to players, one-shot versus repeated games, cooperative versus non-cooperative games, voting games and so on. Except for complete information non-cooperative games, game theory doesn’t offer a solution or an answer. It is more of an approach. Complicated questions of why Indians are the way they are require answers that depend on more than simple applications of prisoners’ dilemma or free-riding experiments. There is a volume of Indian literature also, using game theoretic applications.

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That’s the biggest minus of this book. It skims the surface (without always possessing the necessary knowledge) and looks for superficial answers. Three typos (or apparent typos) are illustrative. First, there is a chapter on game theory and the Gita and it quotes from the Gita, not just in English, but also in the Sanskrit (with Romanised transcriptions). The problem is that there are outright howlers in the transcription. Second, who has ever said the Hindu rate of growth was 2 per cent (p.164)? Third, and I am appalled Penguin let this pass, “India is a functioning anarchy. – Bertrand Russell (Philosopher and US Ambassador to India, 1962)” (p.115). It was John Kenneth Galbraith who said this. (This is not a typo, because Russell is maligned thus twice, the second time on p.104.)

However, there are several pluses that compensate. Raghunathan writes really well, as befits a newspaper columnist, and his writing is not dry, but is laced with humour, satire and sarcasm, extremely reader-friendly. There are rare instances where a reviewer thinks, I wish I could have written like that. This is one of those rare instances. More importantly, the examples he picks up to illustrate applications of game theory are remarkably innovative — Veerappan, Ram and the goat for prisoners’ dilemma, Indian exporters, entry of foreign universities, Zahira Sheikh, TVS, ITC, Sourav Ganguly, Indian Airlines and Indian airports. It is this that makes the ten chapters so entertaining.

In addition, there is a preface, a prologue, an epilogue and two technical appendices, with a clever parody of Tagore’s “Where the mind is without fear” thrown in. John Nash wrote his seminal papers on game theory in the early 1950s and outside the theoretical economist fraternity, few people may have known what Nash had done. A Beautiful Mind, the film more than the book, changed that and got the layperson interested. On a much smaller scale, if this book gets more Indians interested in such stuff, that itself should be adequate reward for the author.