Here’s a thought experiment: think of a few different times you played board-games with your friends. Any game will do — Scrabble, Chess, Clue, Monopoly, Risk, or other games, like Jenga or D&D. As you remember each one, notice how different games can change how players behave. Do some games make players more competitive or likely to laugh? Do people get angry over a certain game more often & do you notice any patterns, here?

Games & Economics :

How Rule-Books Shape Society



Usually, a game of Scrabble or chess does not end in combat. Disputes over a game of Monopoly, however, are known to tear friendships apart occasionally & even land people in jail. After a survey claimed that 51% of Monopoly games ended in a fight, the game’s maker even set up a hotline for settling rule-disputes during the holidays, hoping to reduce festive family fist-fights. But, if Monopoly is only a painted board in a flat box with some dice & a few figurines — just like Candyland & other games — how does it affect human behavior so differently?

The effects, of course, are not a result of a game’s materials but of the systems of rules we follow when we play…

Games & Science

Entire fields of research are dedicated to studying how games work & how we change when we play them. Ludology, often called “game studies,” looks at how games are designed, why people play them, & what functions they serve in society. Certain sports, for example, may promote social values ( like teamwork ) or serve as a healthy outlet for aggression, while various board games & puzzle games are designed to teach kids math, logic, & other skills. Some games appear to be more useful than others, however, and scientists also study how games may harm society, like whether violent video games might cause violent behavior.

Game Theory & the Idea of Equilibria

Game theory, on the other hand, is a type of mathematics that tries to develop models of conflict & cooperation between decision-makers. In other words, game theory deals with stuff like how a choice of strategy can force an opponent to choose from a set of counter-strategies, forcing the first player to choose a new strategy & so on. Game theorists look for the optimal strategies in different games or situations by finding the choices that give each decision-maker the best possible chance of succeeding. When no player will be better off by changing strategies, it is called an equilibrium ( plural: equilibria ) and the optimal strategy has been discovered.

But these models apply to a lot more than just games — in fact, game theory has proven useful in many areas of research, including computer science, evolutionary biology, & economics…

STRATEGY :

Behavior Shaped by Rule-Systems

Long before game theory existed, chess players had found many of the optimal strategies for different scenarios but game theorists proved that some strategies are objectively the best. To say it another way, the optimal strategies in a game are pretty much determined as soon as the rules are written — before anyone even played the game.

If a system of rules has already decided what the best strategies are ( as they do in chess ), the winners will be the ones whose behavior is nearest to the best strategies. Since winning feels good ( or at least we believe it will ), a regular player’s behavior — whether they know it or not — is trying to conform to these optimal strategies created by the rule-system. This is how systems of rules can actually shape people’s behavior. Now — back to the question of why Monopoly turns people to the dark side…

How Monopoly Transforms People Into Monsters

Just like the chess players who discovered the strategies that worked, Monopoly players find that kindness does not pay out & that mercy is a disadvantage. To win, all you have to do is bankrupt your friends & family — and winning is good, right? The complexity of Monopoly can also frustrate newer players & leave them vulnerable to being misled by the advice of experienced players ( who gain no advantage from being helpful ). While a list of all potential sources of human suffering in Monopoly might easily fill a book, the point is that Monopoly’s rule-system turns being an asshole into the optimal strategy for raking in that colorful cash. And, speaking of monopoly money…

Now that you understand how strategy is determined by the math of games & how rule-systems shape a player’s behavior, we can look at what this teaches us about how society works. What if I told you that there is a big game that is being played all around you — a game that we have all been playing without knowing it — a game that all of us were signed up for on the day we were born? Take a look. Can you see it? Like Monopoly & chess, the rules of this big game create a set of optimal strategies that is shaping the behavior of its players — your behavior & mine.

The Economy Is a Game

I mentioned above that game theory has been applied to economics — this is because an economy is a game. Economies are systems that produce & distribute society’s wealth — but, from a game theorist’s point of view, an economy is also a game & a population is a group of decision-makers ( players ). To succeed in this game, each player or group of players competes to control a part of society’s wealth, using only the strategies that are allowed by a system of rules. Many basic strategies involve producing & exchanging wealth or services, while other strategies — depending on the system — can involve controlling resources, financing other players, or investing in markets.

Whoever Dies With the Most Stuff Wins

In an economy, the players start with random advantages & disadvantages and, as a result, not all players are given the same best choices. Investing, for instance, may be optimal strategy for players who start with some wealth, while the best choice a player with none can make is to help produce something. That is called an asymmetrical game. Unlike chess ( which starts players with equal resources ), games of production & distribution are not played by identical players with equal access to strategies.

Asymmetrical does not mean “unfair,” however — and, while modern economies are fundamentally asymmetrical games, they also happen to be fundamentally cooperative games…

When the Game Is No Fun ,

Its Rules Can Be Changed

By the same power that Monopoly turns us into Sith Lords & chess turns us into thoughtful people who sit at cafes, economies can mold behaviors — but, with entire societies at play, the effects can be a bit more serious. Like games that mix strategy with the random throw of a die, economic games are hard to predict when irrational human decisions, disasters, & geopolitical events upset the game board. Nonetheless — when the decisions of every player are added up — the powerful shapes of equilibria emerge and pronounce the inevitable numbers that silently beckon each economy & guide their elect to success.

But math equations are always true in both directions — and the rules of the game can be written “backwards,” as it were. Since we can use rule-systems to predict the outcomes & player-behaviors of a game ( which we can ), we can do the opposite, too. We can choose the best behaviors & outcomes and use them to predict or design new rule-systems for better games or more productive & inclusive economic systems.

This is not ideology — this is math.

It’s Time to Organize the Playground

& Get All of Our Lunch Money Back…

On playgrounds, children only play a game until enough of them are sick of it and — when that happens — the game ends, regardless of the rules or whether it was “over” or not. The problem in the United States ( & other places, too ) is that people have forgotten that the game is under their control — we believe the Monopoly money is real. We speak about money & debt as if they were objectively real, like gravity & inertia — as if they were not the imaginary fruit of a make-believe game. The 1% knows it. Wall Street has been using game theory to amass wealth for a long time, now — but seeing the economy as a game comes easy to the ones who are writing the rules…

If I was a banker or a politician, the thing that would keep me up at night would be the thought that people might someday realize that it is all monopoly money. When people start discussing & designing the games that we want to play next, all of their power turns into vapor — but how can we get there? Changing the way we think about things is hard — but definitely possible. Do the math — & you’ll figure it out.

In solidarity,

John Laurits

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