Dear Colleagues,

General Green is facing the Blue enemy:

- If Green chooses attack plan R1, he will win the battle and the enemy will lose 10,000 men when Blue responds by choosing defense plan C1,
or he will win the battle and the enemy will lose 10,001 men when Blue responds by choosing defense plan C2.

- If Green chooses plan R2, he will either win the battle with two more enemy losses (10,002) when Blue chooses C1,
or Green will lose the lives of 250,000 of his own men (essentially losing everything) when Blue chooses defense plan C2.

General Green is advised by his decision analysis experts that according to their rationality theories he should choose between plans R1 and R2 by tossing a coin -- not a fair coin but such that the probability of R2 is small, but still positive.

General Green concludes that his advisers’ rationality theories are irrational. In his opinion, risking the lives of 250,00 of his men in order to increase the enemy’s losses by 2 is not a rational choice. Is General Green irrational?

For analysis see the short paper entitled “Game Theory Foundational Errors — Part III” at http://www.scientificmetrics.com/publications.html

Yours truly,

Jonathan Barzilai

Dalhousie University