New Dimension to Game Theory: Relationship between Generosity and Time
http://www.latimes.com/news/science/la-sci-generous-or-selfish-20120920,0,4468031.story
The lead author David Rand, using a modified “public goods game,” has offered a new dimension to the traditional game theory experiments that we are all familiar with, whether that is the “prisoner’s dilemma” or the “dictator’s game.” That new dimension is time. In the study, the results highlight that the people who were forced to decide quickly in their giving donated on average 14% less of their money than the people who were given more time. By publishing this study, Rand has opened up a new area of exploration regarding this relationship between generosity and time; this is one of the first studies to examine such relationship. With evidence that people are inclined to give more if they have less time to contemplate about it, this brings a new dimension to our game theory models, as we normally do not take into consideration continuous time between decisions. Researchers are also evaluating many possible reasons for such phenomenon: some suggest that it is an impulsive generosity innate in human nature; others suggest that the generosity is shaped over time after years of interaction with people and learning how to cooperate. These explanations go beyond economics and touch on topics like cognitive science and philosophy, but the magnitude of the possible implications will probably motivate many to investigate these findings.
In game theory, we assume that every decision made is rational by each player. However, in the growing field of behavioral economics, we realize that people sometimes do not make the “right” decisions that seem rational according to traditional axioms, and we observe other factors that affect people’s relative utilities. In this study, it is exploring the amount of giving depending on the time allowed to process and make these decisions. In times of stress and time crunches, this study suggests that people are naturally more likely to give more. If such conclusions are true, this could challenge current practices by groups and organizations that do not take advantage of this phenomenon. This could lead to new political fundraising campaign ideas or government support-raising project ideas; this could lead to new advertising and marketing techniques by corporations as well. The “science” of giving is still a mystery, but this study sheds more light in this area, using game theory as its flashlight.
Over the past several weeks in class, we covered game theory and emphasized that the players are self-interested rational thinkers. Such study connects well with the class, as it provides another alternative to the realm of game theory, exploring other factors and biases that may come into play. Rand with his study has explored the factor of time, which has significant implications for many groups and organizations, as mentioned above. While some critics were less convinced of the results and have questioned its data collection methods, Rand definitely highlights a new relationship that can be further explored. In class, we explored different games other than what Rand used for this study, but we can now modify these games with this new dimension and examine them in different contexts.
-Ludio