Analysis of “Prison Breakthrough”
This recent post on The Economist takes a deep look back into the life of John Nash and how he was able to devise his now famous “Nash Equilibrium”. His end goal was to use a basic example of how prisoners would react to a choice that is dependent on another party’s choice, and utilize this strategy to examine how economic markets behave.
While not mentioned quite as much but still just as important, everyday decisions made by humans can be explained through this as well, including those choice that may appear at first to have a negative impact on one-self. For example, parents not vaccinating their children against measles can be explained by their financial incentive not to pay for the cost. The article also cedes credit to other pioneers in the Game Theory movement, such as once praised mathematician John von Neumann, who was exposed to Nash’s work and called merely an extension of Neumann’s proof that there is always an equilibrium in a two-person, zero-sum game. The article concludes by wrapping up Nash’s life, and how he was honored with the Nobel Peace Prize before tragically losing his life in a car accident.
This article clearly connects with our Nash Equilibrium discussion in class. The outline of John Nash’s life goes into great detail about how people will always find the best solution for themselves, even if it means analyzing their counterpart’s strategy. It is interesting how the games that he has devised can be structured where people choose a solution that probably is not the best for them in hindsight, but because of their personal incentives, it winds up occurring that way. As we continue to solve problems relating to Nash Equilibrium it is always important to remember that as a third party analyzing the situation, it is tough for us to agree with the turn out, but it is also difficult to relate to the outcome when you have no idea, at first, what your opponent could possibly be thinking. I personally wonder how the element of collusion and betrayal can play a role, as there could be a whole different payoff matrix for working alongside with your opponent to optimize a solution for both parties and then betraying to maximize personal return.
I find it to be quite a sad story that such a brilliant mastermind such as John Nash suffered through schizophrenia and yet was able to make so much progress on this proof. Nash Equilibrium is very much applicable in a variety of settings, and it take a look into the human mind in such simple yet groundbreaking matter and explains why things the way that they are. I can say that it is a bit of a shame that even the most charitable of people are doing what they do out of self interest, but the fact that they are able to do so much beyond themselves and support the community, that they should not looked down upon for taking benefits for themselves, such as vacations and pay raises. Because even with everyone acting in self interest, it is quite amazing how communal our society has evolved and developed.