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Maximizing gains with expert games
Posted By Abigail Klein Leichman On October 15, 2009 @ 12:00 am In | No Comments
Whether your goal is to win a war or to persuade bees to pollinate, the bottom line is incentives, say the experts at Israel’s Center for the Study of Rationality.
From auctioneers to dolphin handlers, economists to botanists, Israelis seeking to do their jobs more effectively can all turn to one address for ideas – The Hebrew University’s Center for the Study of Rationality.
For the past 18 years, members of this interdisciplinary powerhouse have been examining processes that opponents use to maximize desired results in diverse situations.
Each member combines this “game theory” approach with personal expertise – in mathematics, economics, psychology, biology, education, computer science, philosophy, business, statistics or law – and together they have produced numerous discussion papers and more than 500 research reports that address varied areas of conflict.
The practical applications are almost limitless, according to Nobel laureate Robert J. Aumann, a leading game theorist involved with the center from its inception.
Whether the “game” is matching candidates to jobs, winning a military or legal battle, or even persuading dolphins to cooperate and bees to pollinate, the bottom line is incentives, he tells ISRAEL21c.
Honing in on incentives to get the job done
“You might think that plants don’t have incentives to do anything, but that’s not the case,” Aumann reveals. “One of the remarkable facts that has emerged in evolutionary biology and in game theory in the last few decades is that animals and plants behave as if they want to achieve certain goals.”
Criminal justice is the subject of several of the center’s hundreds of published research reports. Right now, PhD candidate Yosef Zohar is focusing on the institution of plea-bargaining. Zohar knows about this first-hand; in 2003, he was wrongly indicted for the murder of his father and was only acquitted after a five-year legal battle during which he refused to plea-bargain.
He’s now studying how that incentive-based system, through which more than 90 percent of cases in Israel are settled, impacts criminal justice.
“He enters into a game theoretic analysis to prove that plea-bargaining’s effects are unjust as well as inefficient,” says Aumann. “If he’s right, this has wide policy implications. It could lead to a public drive to forbid plea bargaining.”
Rational people make more mistakes
Uri Weiss, 29, who graduated at the top of his Tel Aviv University law-school class, is investigating several projects at the center. Among his propositions: Rational people make more mistakes than irrational people do; and the threat facing a victim from a potential robber is reduced through negotiating a lesser punishment.
He knows that these conclusions contradict conventional wisdom. “Game theory may help us to see results that are opposed to our intuition,” says Weiss.
The center’s 42 members – including such prominent people as Eugene Kandell, economic adviser to Prime Minister Benjamin Netanyahu, and human rights attorney Ruth Gavison – are frequently called upon to tackle thorny problems in Israel’s public and private sectors, ranging from how to run better auctions and elections, to how to fix the economy and motivate workers.
Toward optimal decision-making
In 1991, economist Yoram Ben-Porat, then president of the Hebrew University of Jerusalem, convened a committee of four to found the center. Along with Aumann, a longtime professor of mathematics, he tapped scientific philosopher Itamar Pitowsky and economists Motty Perry and Menahem Yaari. Yaari is also president of the Israel Academy of Sciences and Humanities.
“Ben-Porat saw that we have activity in all these disparate fields going in the same direction – toward optimal decision-making,” says Aumann, who recently shared insights from colleagues about the world financial crisis, among other topics, during a 15-lecture tour in South Africa.
He is hopeful that activities such as these, and the center’s frequent workshops and seminars, including a popular Rationality on Friday colloquium, will continue despite severe funding shortages of late.
In conclusion, he praises Ben-Porat for his vision, pointing out that, “He decided to bring all these people together and it really worked out. It is accomplishing what it was meant to.”
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