The Origin of Games: A Theory of the Formation of Ordinal Preferences and Games

Abstract

When faced with situations involving strategic interaction, game theory has shown itself to be an invaluable approach to understanding actors’ behavior. The complex calculations that decision makers face in such situations can be simply and usefully represented with simple mathematical formulations and solved for an equilibrium (or equilibria) based on straightforward assumptions. But most analysts in international relations wrongly think of game theory as a panacea for understanding how states or nonstate actors will behave in international politics. They forget that game theory is simply a mathematical tool that allows us to predict what actors are likely to do in interdependent situations. Instead, they often write as though game theory provides insight into why actors find themselves in particular interdependent situations. To construct games in the first place, game theory is of little use. Rather, we need an analytical approach to aid in specifying international strategic interaction situations. Once we know what types of games we think actors are in, we can use the full mathematical power of game theory to examine likely bargaining strategies and outcomes.