I think the essence of this debate is turning more in the
philosophy-of-science direction, which could be a bit off-topic for
this list. Scott's question seems to be, what is the value of the Nash
model if it is not, as admitted, specifically realistic? For
"unpacking" the first paragraph, I offer the example from the second.
What is the value of having this example expressed in terms of a very
simple equilibrium model, rather than an ABM simulation model? The
same as I would see the value of any similar model. Simple, elegant
(my opinion) models such as this serve as great communication devices
and "tools to think with". I present this kind of model to my students
and you see the "Aha!" light go on. I then see them translate this
particular example to other contexts, and begin to see the causes and
consequences of real-world happenings with different eyes--from an
explanatory viewpoint.
At the same time I have students who would not connect with the
equilibrium model, but would with the simulation version.
Certainly the value of models, and of particular types of models, is
highly subjective, and we are unlikely to (and shouldn't) come to a
consensus. The Nash model, in its equilibrium form, does harm if it is
the only approach that is accepted as valid and correct. But I see the
simulation modeling community as one that is specifically interested in
a diversity of approaches and in comparisons among various approaches.
Thats what makes this community (and these sorts of discussions)
interesting and fun. So, enough from me!
Dawn
On Friday, April 7, 2006, at 11:54 AM, Scott Moss wrote:
> Dawn Parker wrote:
>
>> Let me also come to the defense of the basic Nash equilibrium model.
>> While probably never strictly true in the real world, it provides a
>> great heuristic device for understanding real-world motivations,
>> interactions, and their potential results. The Nash model is a great
>> story, a great metaphor, that does reveal explanation--even for
>> potentially more complex problems that many complex systems modelers
>> are interested in. As a specific model, in its equilibrium form, it
>> is often insufficiently complex to be useful. But the strategic
>> interactions that is describes are great building blocks.
>
> I would feel a lot happier if Dawn would unpack the above paragraph.
> What makes it a great story or metaphor? What explanations does it
> reveal-- even for simple problems? We can deal with the complex ones
> later.
>
>>
>> As someone who studies resource issues and consumption decisions, one
>> of my favorite game-theoretic examples is this simple story about how
>> dependence of one's sense of well-being on one's relative level of
>> consumption can lead to over-consumption at a social level. The idea
>> is that each person is motivated to consume more to do better than
>> his/her neighbor, but if each neighbor is similarly motivated, both
>> can get locked into a socially sub-optimal level of consumption--each
>> would be happier if they both consumed less.
>
> Juliette Rouchier presented a model of the Potlatch tribes in North
> Americ at the 1998 ICMAS meeting. They impoverished themselves by
> giving ever more extravagant gifts to one another. Sounds canonically
> similar to Dawn's "socially sub-optimal level of consumption". As I
> remember, there was no game theory or Nash equilibrium in her model.
> And if there had been, it wouldn't have improve the story. I guess my
> question here is something like "what is the added value of Nash
> equilibrium?"
Could you have used the model to demonstrate that everyone would have
been as well or better off had they followed a different set of rules?
Was the outcome based on strategic interactions and expectations about
the behavior of others? The strategic interactions offer an
explanation for how the society can fall into the "bad" outcome. I
haven't seen this paper, but it may embed these game-theoretic
characteristics, and extend them into a more complex, dynamic, and
interactive environment that would be possible in an equilibrium
framework.
Dawn Cassandra Parker
Assistant Professor
Departments of Geography and Environmental Science and Policy
Center for Social Complexity
George Mason University
401-874-9197 (though August 15, 2006)
dparker3 at gmu dot edu
http://mason.gmu.edu/~dparker3
NOTE: I am on leave at the University of Rhode Island through August,
2006
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