The social scientific interpretation of game theory

Abstract

Though formally part of mathematics, game theory from its inception was developed with an eye on the social sciences. It was conceived as a deductive theory that would predict social outcomes by explicitly in? corporating psychological assumptions about individual decision making. While the novelty of game theory lies in its formal recognition that decision makers take into account the existence of other decision makers, its broader philosophical importance is that it opens the pos? sibility of reconciling the demands of rigorous science and the special psychological features of human social life. The compatibility of traditional psychological conceptions and ex tensional logic, the canonical idiom of science and mathematics (Quine, 1960), has long been subject to question. Game theory's at? tempted reconciliation of the two is thus of some theoretical impor? tance: if successful, game theory represents not merely an argument but a demonstration that the formal techniques of mathematics can ground the study of the psychology of social behavior. In this paper, I suggest that typical social scientific interpretations of game theory are incompatible with the formal foundation of game theory as it is usually characterized. I therefore propose a modification of the formal apparatus. This small price is exacted to accommodate social science. Of equal importance, I propose a radical revision of the interpretations themselves. Specifically, I propose that game theory, in the social sciences, be understood to model directly the structure of so? cial institutions rather than the decision making problems of individuals or groups of individuals. This means a departure from methodological individualism and more significantly an expansion of social theory's on? tology to include not only behaving individuals but institutions that structure their behavior. It means excluding mentalistic conceptions of choice and information.