Game Theory in Business Ethics: Bad Ideology or Bad Press?

Abstract

Solomon’s article and Binmore’s response exemplify a standard exchange between the game theorist and those critical of applying game theory to ethics. The critic of game theory lists a number of problems with game theory and the game theorist responds by arguing that the critic’s objections are based on a misrepresentation of the theory. Binmore claims that the game theorist is in the position of the innocent man who, when asked why he beats his wife, must explain that he doesn’t beat his wife at all (Binmore, 2). However, even if we agree that the denial is true, we might still like to know why, if you are not beating your wife, do others consistently accuse you of doing so? Or, to get away from this rather sexist metaphor, why are critics of game theory like Solomon (according to game theorists) consistently getting game theory wrong?While, as I argue in the first section, critics of game theory such as Solomon may misrepresent game theory, this misrepresentation is not entirely their own fault. The way in which game theory is traditionally presented is misleading. For example, students are usually first introduced to game theory through the prisoner’s dilemma. It is compelling drama, but lousy PR for the use of ethics in game theory. (You want to know what to do? Let’s see how two thieves reason.) However, while Binmore is right to argue that game theory neither assumes nor entails the theory of human nature that Solomon finds objectionable, Solomon is also right to argue that game theory is promulgated and applied with what appear to be a robust set of assumptions about human motivation. I argue in the second section, however, that in fact neither these applications of game theory, nor game theory itself, is committed to a particular theory of human motivation. Thus, while game theory is not able to provide a complete ethical theory (assuming that a theory of human motivation is essential to such a theory), it is not contrary to ethics. In the final section I note that Aristotle, rather than being the alternative to using game theory in business ethics, as Solomon suggests, actually points the way to an ethical theory that can combine a discussion of both game theory and “those nagging and controversial questions about what it is that people do and ought to care about” (Solomon, 7).