My research background is Operations Research and Social Simulation. More recently I got involved in discussing ways of linking Behavioural Economics models/ideas to Social Simulation. One method that seems to be well suited for this purpose is behavioural game theory. But there are still a few fundamental things I do not understand. Perhaps someone can help me with this.
I was wondering how the outcome of a behavioural game theory experiment helps one to solve concrete problems in the real world. What is the research process one would use? Do I start my investigation with having a concrete problem in mind and think about which game can help me to solve it or do I start my investigation with a game and then think about which concrete problem this could solve or do I just provide the results of a game and let other people find concrete applications in the real world?
Having read recently about the public goods games I was wondering if I can somehow use or link the outcome of such games to build social simulation models of shared houses. Does that make any sense?
FROM DATA TO THEORY: Augustin Counot developed theory from data and experiment. The supply and demand curve were derived from experiments. Whereas Alfred Marshall working on the same problem 30 years later who explained his approach as:
"(1) Use mathematics as shorthand language, rather than as an engine of inquiry. (2) Keep to them till you have done. (3) Translate into English. (4) Then illustrate by examples that are important in real life (5) Burn the mathematics. (6) If you can't succeed in 4, burn 3. This I do often." See Dimand.
FROM THEORY TO DATA: John F. Nash's approach is to start with theory, i.e. a mathematical model about human interactions. This theory-to-data approach later became the basis of many models in human behaviors, economics, foreign policies, etc. The weakness of this approach is if the theory does not have the data to match, the theory just remain a theory. However, it empirical data supports the theory and the theory gains acceptance and popularity, the approach is equally valid. Nash was award the Nobel Prize in 1994 for his work.
FROM OUTCOME TO THEORY: Most theories of human behavior is to move from data to theory. Through observations, the researcher tries to make a generalization. From the general statement, a mathematical model is built and then subject the model to empirical test. Alfred Marshall seems to have followed this path. So too was Charles Darwin from his observations of the Voyage of the Beagle.
REFERENCES:
[1] Cournot A. (1838) Researches on the Mathematical Principles of the Theory of Wealth
[2] Dimand, Robert W. (2007). "Keynes, IS-LM, and the Marshallian Tradition". History of Political Economy (Duke University Press) 39 (1): 81–95. doi:10.1215/00182702-2006-024
[3] Nash, John (1950) "Equilibrium points in n-person games" Proceedings of the National Academy of Sciences 36(1):48-49.
[4] Nash, John (1951) "Non-Cooperative Games" The Annals of Mathematics 54(2):286-295.
Peer-Olaf
Are you familiar with the late John Maynard-Smith's applications of games theories and nash equilibria to studying evolutionary stable strategies?
There is quite an interesting discussion about this (including a fascinating example) in Guala (2005): The Methodology of Experimental Economics. New York: Cambridge University Press, chapter 8.
Please make you familiar with the application of sequential choice and fund voting, see short on http://www.abcd.is/en/research.html
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