Abel Lockhart
Professor Crowe
Composition for science
10/13/2023
The Economics of Information
As the Austrian chancellor strengthened his reign through anti-semetistic laws in Germany, jews had begun their escape all around the globe. Most of them, ending up in the land of opportunity. With approximately one million Jews in New York, there is one to have made a great contribution to economic science. With a collection of several books enhancing our understanding of human interaction through game theory, coming up at about 93 years old, I present you the one and only, Robert Aumann
Made in 1995, The book “Repeated Games with missing information”, explores how limited information affects decision making. This paved the way for extensive research on the theory of Repeated Games, further expanding on how cooperation, punishment, and reputation-building evolve during interactions. It provides an understanding to the everyday events that occur in our lives such as Alliance building, market behavior, and sustainable cooperation under various contexts. In 1965 the first American troops were deployed in Vietnam, all while simultaneously maintaining a cold war with Russia. This prompted the United States Arms Control and Disarmament Agency to act upon the gradual disarmament issue. Contracted by the United States, Robert Aumann had begun research on arms control negotiations with a collaboration of research. Repeated Games with missing information dives into depth of how corporations and markets may adapt and strategize without knowing the full extent of the situation.
I am deeply interested in human interaction. I like getting to understand the world around me through taking in and interpreting the vast amounts of culture and beliefs that build up our society. Making the effort to understand what provoked someone’s decisions allows for peaceful confrontation, and thus a chance for human connection. Robert Aumann manages to decipher the strategies in our human interactions through concepts such as strategies, collusions, reputation and credibility, and Folk theorems.
Folk theorem is an interesting concept where both parties achieve success through cooperation. “In any bargaining situation, it is of the utmost importance for each side to know how the other side evaluates the situation” , Robert follows this up with an example of two individuals trying to divide a piece of cake with a cherry amongst each other. One piece contains a cherry while the other does not. Subject A doesn’t know that Subject B likes cherries. Without communicating, Subject A gives Subject B the cake without the cherry. Subject B is left unsatisfied. Both subjects could have been satisfied if communication was a part of the process. Where communication is missing there comes conflict.
The movie, The Platform, consists of 100 platforms with 2 prisoners per floor. They are fed by a descending platform with a barrage of food, Those at the top of the platform consume the most whilst those at the bottom are left scraps. Some people try to consume as much as they can while others encourage only consuming what is needed. The prison acts as a test to see if Folk Theorem can occur. Greed persists throughout the whole film as the paranoia of ending up at the bottom can lead to impoverishment in an unjust system. It serves to show how without proper communication to evenly distribute resources, everyone will have to suffer the paranoia caused by limited information. Just like the book characterizes parts of the cold war’s most heated moments, both parties did not unleash their Nuclear arsenal upon one another, all the while having limited knowledge of the enemies intentions.
It is through game theory that Robert Aumann Enhances our understanding of conflict and cooperation. As said by Robert, “Game theory as About entities interacting, while striving for different goals”
