How games and game theory have changed the world

John von Neumann, the father of game theory.
John von Neumann, the father of game theory.

Summary

  • A provocative history of gaming’s influence calls for a change in the rules

Playing with Reality: How Games Shape Our World. By Kelly Clancy. Riverhead Books; 368 pages; $30. Allen Lane; £25

In 1824 Prince Wilhelm of Prussia asked for a demonstration of an elaborate game he had heard about from his military tutor. The Kriegsspiel, or war game, had been devised a few decades earlier as a more militarily realistic form of chess. Instead of regular squares, the board was a detailed map of a real battlefield. Wooden blocks represented different military formations; each turn of the game simulated two minutes of battlefield combat. Damage was worked out by rolling special dice and using odds-based scoring tables based on casualty statistics from historical battles. The game took two weeks to play, during which all cats had to be banished from the vicinity, so they did not climb on the board and mess up the pieces.

Game theory, war games, probability theory, artificial intelligence, social media, gamification, Nash equilibrium, prisoner's dilemma, mutually assured destruction, economics, behavioural economics, cognitive biases, neoliberalism

The prince was enchanted, and every Prussian officer was ordered to learn to play the game. It allowed new tactics to be tried out, even in peacetime. The rules were constantly updated with new weapons and statistics. When Wilhelm became king, Prussia’s unexpectedly swift victory in 1871 in the Franco-Prussian war was attributed to these gamed simulations.

By the time of the first world war, Kriegsspiel was being used to predict when German battalions were likely to run out of ammunition, allowing timely replenishment—what would now be called supply-chain forecasting. In the interwar period, German planners used it to develop Blitzkrieg tactics and simulate the invasion of Czechoslovakia. When Hitler invaded Russia, both sides relied on the game to predict how the campaign might unfold.

The story of Kriegsspiel is just one of the many examples marshalled by Kelly Clancy, a neuroscientist and physicist, in her wide-ranging survey of how games can shape reality. Her story starts in earnest in the Renaissance, when mathematicians first developed probability theory, in part so that they could understand games of chance involving dice and cards. Games thus helped reveal that even random events were governed by laws and were susceptible to analysis. The resulting techniques were applied to medicine, population studies and the analysis of scientific errors. The German polymath Gottfried Leibniz saw games as models of the world, and thought studying them could “help to perfect the art of thinking". The creators of Kriegsspiel were inspired by his work.

Such war games, in turn, prompted John von Neumann’s initial steps in the development of what is now known as game theory, a branch of mathematics that could, its proponents hoped, be the physics of human nature. By the 1950s the theory had been fleshed out, with now-familiar ideas such as the Nash equilibrium and the prisoner’s dilemma, which consider how adversaries adjust their strategies in response to each other’s actions. Game theory directly underpinned the idea of “mutually assured destruction" during the nuclear build-up and stand-off of the cold war. It has since been applied in fields ranging from trade to evolution.

In the 21st century, the influence of game-like mechanisms has assumed a new, digital form. Social-media platforms are akin to games in which users compete for clicks and attention; apps have gamified dating, fitness and language-learning; and woe betide anyone whose rating on eBay, Uber or Airbnb, based on scores from other users, falls too low. Games have also been central to the development of artificial intelligence. Modern systems rely on the computational horsepower of graphics chips originally designed to run video games; and games have driven progress in the field, from chess, to Go, to the ImageNet image-recognition contest.

Gaming’s power to shape reality, then, is incontrovertible. But Ms Clancy argues that games are “a map that warps the territory". Though they may be internally consistent, that does not mean they accurately reflect the world. Yet they are often treated as though they do. Worse, the neat models of reality that game theory provides not only misrepresent reality, she argues, but can deform it in malign ways by affecting how people act. Humans are not the reward-maximising automata that game theory and economists like to assume.

Economists are well aware of this, of course. The field of behavioural economics aims to understand how psychology, not just cold logic, affects decision-making. Ms Clancy dismisses it as “one of the least reputable fields of science" because it is “richly funded by corporations". She objects to the way that behavioural economists refer to “cognitive biases" as though they are defects in human thinking, when in fact “they are the way thinking works". Economists, it seems, are wrong to apply game theory uncritically, but are also wrong to try to address its limitations.

In Ms Clancy’s telling, the overzealous misapplication of game theory lies behind many of the world’s problems, including economic exploitation, manipulation of public opinion, racism and neoliberalism. Some readers may grow weary of Ms Clancy’s demonisation of heartless economists and cut-throat capitalism. Although games and game-like mechanisms are not inherently bad, she argues, they have been used to “launder dubious beliefs" by “data-hungry technologists" and “rapacious business interests". The challenge, she concludes, is to find ways to use games for good, rather than ill; to change existing rules and devise entirely new game-like structures, such as fairer voting systems. By turns philosophical and polemical, this is a provocative and fascinating book.

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© 2024, The Economist Newspaper Limited. All rights reserved. From The Economist, published under licence. The original content can be found on www.economist.com

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