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Not So Fast, Curtis!: Digging Deeper into Game Theory

Adam Curtis presents a rather interesting argument and somewhat dark and nightmarish look into our current society and how the ruling class–the economic and political elite forces–have come to transform people into cold robotic machine.  Into series of 1′s and 0′s.  Into rational, self-interested, cold, animal-like creatures.  While I found “The Trap” to be quite effective and thought-provoking, I am not sure if it was completely completely effective in achieving its purpose of enlightening me to the “dangers” and harsh realities that the society has transformed us into numbers, and–as Curtis argues–that the society has made people treat each other in robotic manners.  Overall argument presented to by Adam Curtis–while poignant and interesting–fails to–make the argument into a convincing one at least for me.

To the statement that modern society has made people into super-rational machines, I find this not too difficult to believe.  In fact, I almost found Curtis to be over-dramatizing the effect of game theory with regards to this aspect.  While Curtis chose to focus heavily on the development game theory since World War II with regards to this, the phenomenon was witness far before game theorist began to notice this robotic attitude of people towards each other.  In fact, American sociologist Louis Wirth noticed this phenomenon in society in “Urbanism as a Way of Life”, published in 1938.  Wirth noted that with growing population especially in urban areas, the lives of individuals became more segmented and thereby made intimate relationships more difficult to establish.  In other words, Wirth explained that the social interactions people have with one another became more transactional and economic, striving for utility over intimacy.  This concept is in line with what Curtis attempts to attribute to game theory as the main cause.  Seeing that academia world began to notice this shift prior to development of game theory, I am leaning more towards believing that while game theory probably had some effect–especially regarding its influence on politics and business–much of the phenomenon described by Curtis is in fact a caused more macro-social influence than just game theory.  It seems more plausible and reasonable to believe that the shift of human interaction becoming “rational” began much earlier than Curtis thinks, but probably accelerated by game theory.  In other words, the attempt by Curtis to picture the current society in cold, demonic, machine-like manner is to a certain extent exaggerated as an effect of direct influence from the political and economic elites.

However more importantly with regards to the validity of statements made by Curtis, in certain cases, Curtis overplays his cards and ultimately makes his argument weaker by making the documentary sensationalist.  For example, in the second segment of the documentary–”The Lonely Robot”–Curtis tries to explain to the viewers that companies fictionalized their revenues and profits.  Is his statement completely out of line?  No, he does have some point.  For instance, try going to on-campus recruiting information sessions for investment banks.  Goldman Sachs, Morgan Stanley, Evercore, Houlihan, Citi, RBS, Credit Suisse, whichever one you attend, they will tell you that they are the most successful and most profitable firm.  And they will do this by showing charts and graphs with actual numbers.  How can this be?  How can different firms be number one in the same category.  Well, look closer and you will see that how they slice and dice numbers are different in each chart.  Is this misleading to a certain extent?  Yes.  Is this wrong?  Well, I would argue not.  The notion Curtis dives into here is similar to this logic.  Companies do have different ways of calculating their revenue and income under the guidelines of GAAP (Generally Accepted Accounting Principles) or any other standardized accounting framework.  Does this make looking at numbers confusing?  Yes.  Can it be misleading?  Yes.  IS it misleading?  Maybe not.  Take for instance, how each company calculates inventory.  Some companies find it more convenient to calculate using LIFO (Last-in, First-out) where as some companies use FIFO (First-in, First-out), and some even likes to take averages.  Certain industries and certain businesses have found the best and the most convenient method for each of them.  And while this can make comparison between them somewhat inconvenient and misleading to a normal person, this is not actually misleading or presenting wrong information.  Accounting frameworks forces companies to consistently use the same method in each reports which makes each numbers reliable and stable to be compared back to past historical reports.  In fact, I find this to be completely acceptable and somewhat noble.  Attempting to present your company and your performance in the best light is only natural as long as you do it within the rules.  Going to back to the example, Curtis presents in “The Trap”, companies are abiding by the rules and contrary to the argument Curtis attempts to make, the rule in this case is not trying to purposely mislead and lie to people.  In fact, if they cannot decipher the numbers and look into the second and third and later pages of the financial report to know what the numbers mean, the fault is on the lack of effort and laziness of the public and people rather than the system.  If you bought a nice birthday gift for someone, it is only natural that you want to wrap it in a nice wrapping paper, with your own flair and touch of personality.  It is unfair and stupid to ask everybody to wrap all the gifts in same bland wrapping paper, just so nobody gets confused that they are gifts.  In addition, Curtis makes himself look stupid at the end of this particular segment by saying that behavioral economist are counter-game theorists by studying “if people really do behave as the simplified model says they are”.  In reality, behavioral economics is an evolved form of game theory that builds very much on the basis of game theory concepts.  It is not counter-game theory nor is a “new” discipline as Curtis states.  Yes, it is true that in the past decade or so, behavioral economics has gained enormous popularity in academia and in the private sector, but the concept was established by Adam Smith himself–who Curtis pretty much dismisses as obsolete ironically right before he introduces behavioral economics–in The Theory of Moral Sentiments, actually written before his all-famous Wealth of Nations.  Curtis most definitely went overboard trying to make his argument and by doing so makes himself unconvincing and almost trivial.

In addition, I personally found Curtis to be over-stressing certain aspects of game theory.  For instance, Curtis misrepresents Nash equilibrium by associating it merely with the Prisoner’s Dilemma game.  While the Prisoner’s Dilemma is the most popular, and perhaps most interesting case to present Nash equilibrium, in reality Nash equilibrium is much larger than just the Prisoner’s Dilemma game.  Prisoner’s Dilemma is unique in that it is a game in which Nash equilibrium does not equal Pareto optimal solution.  Pareto-optimal solution refers to a the situation in which neither party involved in the game cannot do better than the solution presented.  For instance, in the Prisoner’s Dilemma game, the Pareto-optimal point would be for both parties to deny any wrong doing.  However, Nash equilibrium–the game theory solution point that takes into account the action of the other player–is for both parties to defect in the Prisoner’s Dilemma game.  This is only one example of game theory and Nash equilibrium.  There are plenty of example in which Pareto optimal point is equal to Nash equilibrium unlike Prisoner’s Dilemma.  In fact, there probably are more cases of Nash equilibrium being equal to Pareto optimum than not.  When Nash equilibrium equals Pareto optimal solution, game theory in fact is serving to the better of all parties involved in the game.  While it does not negate argument presented by Curtis that game theory assumes people to rational, it does somewhat contradicts Curtis in that this view of society serves for the betterment of society as a whole, benefiting all parties involved without sacrificing one for another.

Moreover, Curtis completes neglects to mention mixed strategy concept of game theory.  In most game theory solutions, there exist pure strategy game and mixed strategy game.  Pure strategy game is in simple terms, a simplified version of a game in which choices are either Option 1 or Option 2.  When looking at game theory as a whole, pure strategy represents a smaller portion of the discipline than mixed strategy.  Mixed strategy is a case where one considers the probability and preference of the other party choosing Option 1 or Option 2.  In other words, it is not always the case in Prisoner’s Dilemma that a person as 50/50 probability of denying guilt or admitting guilt.  Mixed strategy takes this into account.  While economist might state that and in reality true that mixed strategy still implies assuming the people to rational decision makers, I believe it inherently also assumes and values the individuality of each human being and that heart–or the irrational side of human–should be taken into account in each game’s probability.

Ultimately, I find what Curtis is saying to be interesting and true in its essence.  However, I do believe that the approach Curtis takes to make this argument is not the most effective way to make his case.  By being over-aggressive (bordering the lines of sensationalism), I found “The Trap” to be propaganda-like, neglecting to present a complete picture of topics being discussed and narrowing the vision only to those that fit his argument (which is natural).  Moreover and more importantly, I do not necessarily find the phenomenon or development of society that Curtis presents with regards to game theory to be disturbing as he presents.

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2 Comments

  1. mushon 01:36, Jan 26th, 10

    Very glad you made that comment.
    Basically there is a cognitive gap in the way the documentary presents Game Theory. If it is indeed a farmula that expects people to betray each other as the best strategy, how did it create the balance of terror? In which both sides decided not to attack?

    Basically the secretaries were acting along the Recurring Prisoner’s Dilemma in which each side knows that by betraying their fellow, will lead to their fellow betraying them in the next round the question pops up. The secretaries continued to work together and hence decided not to betray each other. Pretty rational after all… This strategy is called Tit For Tat. And it is a rational pattern of solving the recurring Prisoner’s Dilemma.

    Your critique of the documentary is well placed. I do believe though that beyond the layers of sensationalism,
    some of the provocative ideas will inform our discussion in class and through the semester.

    [Stylistically: I think you might want to break your writing into a bit more paragraphs. I found that this post could have been shorter. Some sub-titles might make it more accessible too]

    I find

  2. Harris 17:54, Jan 26th, 10

    So your arguments, I suppose, are:

    i) Curtis over-emphasizes the role of Game Theory in the apparent loss of intimacy in the American society. He ignores other factors, such as urbanization.

    ii) There are various ways in which numbers can be used to measure performance. It is a science. You cannot dismiss it as fiction just because you can’t figure out how it works.

    iii) Game Theory and Nash’s Equilibrium mean more than simply the Prisoner’s Dilemma. More complex aspects of Game Theory assume the irrational side of individuals.

    Since your response to Curtis is rational. I’ll make sure my response to your response is personal and anecdotal. Let’s play the difference out :o )

    i) I have recently lived in the 5th and 24th largest cities in the world (Karachi and Lahore, Pakistan). Despite unprecedented urbanization and population growth, there is no loss of intimacy. People always express mutual love or hatred physically or verbally. They never walk right by like they have nothing to do with you. There are other factors at play here in the US. When I talk to people, they always link it to individual liberty.

    ii) Norway is the best country to live in on the planet, according to an agreed-upon UNDP Human Development Index. The US is #13. What is it about the USA that everyone would rather migrate to here than to Norway? What is it about the American dream that cannot be expressed in numbers? Maybe it’s not a perfect science after all?

    iii) But didn’t Nash himself say in the documentary that he over-emphasized rational behavior?

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