- Brendan Stec
Altruism, Vengeance, and Game Theory
Human behavior can be perplexing. We often behave in ways that depart significantly from what a rational economic model would predict (this opened the door for Kahneman and Tversky's prospect theory and the consequent field of behavioral economics). Take altruism and vengeance. We donate to charities or buy a drink for a friend even when it doesn't align with our pure self-interest. Behavioral economic studies also show we are likely to punish unfair behavior even though we'd be better off economically if we didn't.
Why do we act this way? If we look at the situation through our game theory glasses, we may find a clue. Robert Axelrod of the University of Michigan held an iterated prisoner's dilemma tournament in 1980. The tournament crowned TIT FOR TAT, an algorithm by Anatol Rapoport, as the optimal strategy for the game over time. TIT FOR TAT rewarded the opponent's good behavior with immediate cooperation, but punished the opponent's bad behavior with immediate defection.
As humans, maybe we've learned to act like TIT FOR TAT to win the most important game of all: life. Surviving on Earth is tough business: we're constantly competing against our surroundings for finite supplies of food, housing, employment, and sex. A framework where we act with altruism to our allies and vengeance to our enemies may have developed to help us compete better in this harsh environment.
1) "Psychology and Economics" by Matthew Rabin http://www.nyu.edu/econ/user/bisina/rabin_survey.pdf
2) Complexity by M Mitchel Waldrop (mentions the TIT FOR TAT algorithm)