Presuppositions Of The Game Theory Essay Research

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Presuppositions of The Game Theory

Soloman believes that as the game theory gets more sophisticated, we tend to

lose sight of the problem rather than solve it. He sees the problem as how to

get people to think about business and about themselves in an Aristotelian

rather than a neo-Hobbesian (or even a Rawlsian) way, which the game theoretical

models simply presuppose.

Soloman discusses seven presuppositions in the first section of his “Ethics &

Excellence” book. They are: rationality and prudence; motivation and self-

interest; money and measurement; the anomaly of altruism; good and goals; the

open-ended playing field; and the role of the rules. Soloman rejects each

presupposition and gives his reasons why.

This essay will discuss two of these presuppositions and either agree or

disagree with Soloman and then give reasons as to why. The two presuppositions

that will be discussed are money and measurement and the role of the rules.

Money and Measurement

In business, as in most games, we like to keep score. As one of Soloman’s

businessman friends told him “in business you always know how well you are doing.

You just have to put your hand in your pocket.” People often think the more

money one has, the happier they are. You often hear people say “if I only had

more money, I would be happy.” Frequently the perceived level of success is

compared to the size of one’s bank account, the location of their house or the

amount of cars in the driveway. People seem to perceive money as being

happiness.

Soloman says that keeping score, although it is not an essential feature of

games, seems to be one of the most durable features of game theory. He thinks

that the best way to keep score is to have a dependable point system, a definite

unit of worth, which is money.

Soloman rejects this presupposition by first stating that “money isn’t the only

or even primary social good”, and “money is only a means and not an end.”

Soloman agrees with these statements but to further reject this presupposition,

he goes on to discuss another example involving money.

Social theorists, in general, “like to talk about money, because money is a

readily measurable utility, a readily comparable measure, and apparently clear

basis for comparison.” But even some of these unrefined theorists recognize

that equal amounts of money do not have equal significance for different people,

therefore money is not an absolute readily measurable utility. Soloman states

that various ends are hard to compare and so success and “maximum utility” may

be hard to measure. “If we were to assign every end a monetary value, however,

and rate various preferences according to their exchange value on the market, we

would indeed have a single scale on which to compare and evaluate ends and means

and determine utility.”

I agree with Soloman’s reasoning. I do not think that success and “maximum

utility” can be so easily measured with money. Almost everyone in the world

values money, but not all at the same rate. The importance of money varies from

person to person, therefore the “utility of money” varies. Some people rate

money as the most important thing to them. These people usually get lost in

their everyday work life, doing everything for money and measuring everything

with a monetary value. Some people perceive money as important, but not more

important than such things as their families, health and freedom. Then, there

are some people who are happy with what they have. I was once told that the

wealthiest people in the world are the people that are happy with what they have.

These people need only enough money to be reasonably comfortable and they

believe in the importance of self-esteem and peace of mind. People have

different wants and different values, which makes it very hard to use money as

an absolute means of measurement.

The Role of the Rules

We generally conceive games as rule-defined. Almost all games have rules that

must be followed in order to play. There are usually steps and strict rules

that define games and they are mostly played the same each and every time.

Businesses also have rules. They are also defined by steps and strict laws.

Organizations and employees must abide by these rules in order to function

properly.

Soloman also states that games are thought mostly to be rule-defined but he

thinks that business as a practice is much larger than that. In business, the

rules come after and people need to use sensitivity and imagination and not just

obey these rules. He say that there are rules (especially laws) and that it is

both unethical and imprudent to disobey them. Soloman thinks “it is essential

to see business and business life first of all as a practice, not a game, in

which general expectations and mutual agreements are established before there

are any rules, much less laws.”

I agree with Soloman mostly because I too see business as a practice and not a

game. I think that when someone wants to create a business, they generally

establish expectations and mutual agreements but as for any rules or laws, these

are created after the business is setup. You can’t go into a business with

strict rules and laws if you don’t know what the business is. Once the company

goals are set, then there must be rules and boundaries as to how employees can

obtain these organizational goals. Games are very specific. In business, some

rules are very strict, some are made to be bent and some rules are made up as

the business develops. Although laws are not rules that can be bent or broken,

only after the details of the business have been founded can the laws that apply

to this certain company be established.

In conclusion, Soloman was right to reject all of the presuppositions he

discussed in his book. I agree with each and everyone of them. As for money

and measurement, money should not be considered an absolute measurement of

success or “maximum utility”. The value of money varies too greatly from person

to person. A “mom and pop” store owner may be more than happy with the constant

but average amount of money that flows in to him each week but a top executive

may be unhappy with his salary that is probably five times more than the

satisfied store owner. Many various variables must be considered when

attempting to measure success or “maximum utility”, such as values, how that

person defines success, their upbringing, and many more. The role of the rules

presupposition is rejected because, as stated earlier, business should be seen

as a practice and not a game. Games have specific and strict rules and in

business, expectations and mutual agreements must be established before there

are any rules. The rules in business are established after the business is

founded and not before such as in games. I do not think that the seven

presuppositions of the game theory are appropriate and I agree with Soloman’s

rejections.