Game Theory and Parenting
In the NYTimes article, When a Child Thinks Life is Unfair, Use Game Theory, journalist KJ Dell’Antonia suggests applying game theory strategies in parenting. This idea is taken from Paul Raeburn, a co-author of “The Game Theorist’s Guide to Parenting”, in which Raeburn argues that “applying theory strategies helps children make ‘fair’ decisions” since children always complain about what they believe is unfair. One game theory strategy he suggests is an auction, in which the children are the bidders and the parents are the auctioneers. The parents would bid what the children desire (i.e., who gets to play with the tablet, or who gets to choose the restaurant to go to) and instead of bidding money, the children would bid their privileges such as offering to do more chores, or giving away their toys. By holding an auction, children may feel like this is more fair since parents are making decisions based on which child is willing to give up more of their privileges.
As we discussed in class, this type of auction is an ascending auction, in which the bidders continuously offer higher bids, and bidders drop out until only one bidder remains and is willing to pay the highest price. In an ascending auction, the dominant strategy is to bid one’s true value. Because of this dominant strategy, kids will eventually realize it is of their best interest to bid what they believe is worth giving up for. However, as mentioned, kids tend to overshoot what they think they are willing to give up, and find themselves offering to do too many chores during an auction.