Skip to content

Ice-cream for suckers

19/03/2016

Has anyone here studied game theory? No? Good. That means I can tell you whatever I like about it.

One of the first things you’ll encounter in Game Theory 101 is the parable of the ice-cream vendors on the beach. It was invented by a mad professor named John Nash but I’ve tweaked it a bit here.

Imagine a long straight beach running left to right with a more-or-less even distribution of sunbathers along it. The sand is hot and no-one wants to walk too far from their beach towel. There’s a car-park located some distance to the right of the beach centre.

Along comes an ice-cream vendor. We’ll call him the man from Torycream. He’s thinking about the best location to sell ice-creams to sunbathers. Obviously the best place for the sunbathers is right in the middle of the beach. That way none of them have to walk more than half a beach length through hot sand to buy their cones. But the Torycream man isn’t thinking about the best spot for them. He’s thinking about the best spot for him. That’s next to the car-park where the truck from Big Ice-cream pulls up with his supplies. There’s only one ice-cream vendor so the sunbathers can like it or lump it.

But pretty soon a comrade from Social-ice shows up. He surveys the beach and is appalled at the exploitation perpetrated by the Torycream monopoly. “What about the non-workers!” he shouts, and sites himself halfway between the Torycream man and the left end of the beach. Social-ice is now selling ice-cream to all the sunbathers to his left and half of those between him and Torycream.

Torycream isn’t going to take this sitting down. He gets up off his well-tweeded butt and sidles down the beach towards the Social-ice stall, attracting an ever increasing proportion of beach-goers between the two sellers. Social-ice is forced to respond by edging closer to Torycream to protect his middle-ground market share. Pretty soon they’re standing at the same spot in the middle of the beach. They’ve each got about half the sea-side ice-cream trade and no sunbather need walk more than half a beach length through hot sand before making the now arbitrary choice between the two vendors.

But contrary to appearances Torycream and Social-ice aren’t fools. They recognise there’s no longer any difference between their positions and that they have more in common with each other than with the hedonistic layabouts they sell to. So they agree that for their mutual benefit they’ll relocate to the car-park where they can most easily engage with their suppliers from Big Ice-cream while continuing to divide the market evenly. As long as neither defects by offering sunbathers a real alternative it will be more comfortable for both of them.

A hot-footed young woman lying towards the left of the beach is outraged by their complicity. “They don’t give a damn about us customers.”, she thinks, “They’re just tools of Big Ice-cream. Neither of them are lifting a finger to mitigate the scourge of podal warming.”

As there’s no nearby bulldozers she can chain herself to she improvises a placard reading “Smash the popsicle duopoly!” and marches up and down the beach shouting rude things about Torycream and Social-ice. Some beach-goers raise a ragged cheer. Others scowl. All this stamping about might get sand on their ice-creams. The two ice-cream sellers studiously ignore her.

“This is making my feet hotter and getting me nowhere”, thinks the woman. “The only way to change The System is from within.” So she sets up her own ice-cream stall somewhat to the left of the car-park. She names it ‘CoolGreen’.

The man from Social-ice is alarmed. “She’s stealing my constituents!”. He reluctantly tramps down the beach to a spot mid-way between Torycream and CoolGreen. The Torycream man just smirks and stays put. He’s seen it all before and knows how it pans out. Besides, he’s got a cosy arrangement with Big Ice-cream. They’ll provide enough credit to see him through market fluctuations.

“Now I’ve got that stooge from Social-ice by the balls”, thinks the CoolGreen lady. “Let’s see how he likes a bit of a squeeze”. She moves her stall to the right, reducing the space left to Social-ice and cutting his margins to the bone. He’s left with the choice of either standing with CoolGreen and sharing the left of the beach with her or rejoining Torycream in the car-park. For the sake of convenience and Big Ice-cream he does the latter.

The situation has essentially returned to the two-vendor system and the old dynamic reasserts itself. Torycream and Social-ice move a little closer to CoolGreen to try to steal some of her customers. She isn’t about to let them force her out of business and leave the left of the beach without representation. She must show she’s a serious ice-cream vendor too. So she moves her stall closer to them to get her old customers back. Soon they’re all in the same spot. They look at each other, shrug, and retire to the car-park where they share a smoke and agree about how foolish sunbathers are for not moving towards the car-park like them. Then the truck from Big Ice-cream arrives and they restock. They all sell the same ice-creams you see. Only the wrappers littering the beach are different. Because Big Ice-cream realised long ago that you don’t maximise profits by competing. You do it by joining forces against your customers.

So what does this somewhat gamed example of game theory tell us?

It tells us the free market is a lie.
It tells us why Adam Smith despaired of the inevitable domination and abuse of markets by monopolies and cartels. It tells us why the Smith-worshiping free market think tanks seem to have misplaced those bits of his gospel. It explains why they’re all paid to pipe the same one-note tune by corporations that are ostensibly in competition with each other.

It tells us electoral democracy is a lie.
It tells us why the Australian Greens recently teamed up with the pro-business Liberals to change the electoral system and lock out independents and minor parties. Why they blocked legislation that would have forced parties to disclose political donations. It tells us why professional politicians of all stripes furiously agree that voters aren’t smart enough to understand the implications of their own votes, which must instead be guided by proper authorities to where they rightly belong.

It tells us that if we want to live in harmony with the bullshit we’ve built our society from we need to study Orwell’s 1984 and learn the art of Doublethink.

Choice is Democracy!
You can choose to drink Choke or Sepsis. You can choose to vote for Hump or Trillary. Ain’t democracy grand.

Slavery is Freedom!
What better way to demonstrate your freedom than by freely speaking and freely thinking exactly the same way as everyone else in the consumerist chain-gang? You can do it in any colour you like, though some are more likely to get you locked up or shot.

War is Peace!
So I’ll leave you all in somnambulant peace now. Happy shopping. Happy voting.

Advertisements

From → politics, rant

18 Comments
  1. Smiles.. While this game theory is true for domesticated humans who have little regulatory control of their emotions and rudimentary integration of their senses.. The ‘real’ humans freed from the stereotype of matrix skip the politics of culture as folly of others.. However.. Nash himself.. acknowledged his game theory was flawed with his poverty of experiencing any human emotions.. He did not even factor in this human potential of relative free will.. In other words Neo CAN live human too.. Amused at the Human Virus named modern culture.. Capitalism.. Free Markets.. Etc.. Where the ONLY true free is directed within by those who develop relative Free Will..:)

    In other words.. Nash observed the sheep at play and missed the shepherds beyond his ‘sight’..

    His theory is western culture determined but not ‘human’.. Determined.. WiLL..:)

    Like

  2. If you saw the movie.. Let’s just say the pretty girl would have insisted on dancing with ‘me’.. ‘Cause she never met a Real Wild human MAN Before.. Even if 3 or so decades older.. and yes I’ve empirically measured that result.. 600 or so times on my blog as there are not enough Neo’s to go further than a case study so far.. But sure the science of it is real all natural ecstasy.. Yeah.. Like a free Nash2..;)

    Like

    • Gotta admit I never watched any Matrix movies – though my brother worked on them – so I don’t really get what you’re talking about. All I know is that Neo was the superhuman hero and The Matrix was the virtual reality he inhabited.

      Liked by 1 person

      • SMiLes.. I was talking about the Beautiful mind movie specific to Nash’s game theory where he suggested the best result would be to ignore the beautiful blonde.. however Nash knew Close to Zero of an entire other continent of mind that includes emotion.. So as he admitted his theory was flawed..:)

        Like

        • Never saw that one either.
          I don’t watch many movies.

          If Nash said the best option was to ignore the blonde I’d guess he meant within the parameters of the model. You might as well say the ice-cream vendor model is flawed because it doesn’t account for weather. It might be raining and the beach is deserted.

          Liked by 1 person

        • Nash’s basic idea was Adam Smith was wrong and to do what was best for the individual and the group was best.. And that makes sense but ignoring the blonde is only for beta males.. Smiles.. Again.. as metaphor of course..:)

          Like

  3. In other words.. He viewed humanity as a chess game.. But pawns have zero emotions.. As well as King’s and Queen’s as metaphor of course that would go ‘write’ over Nash’s head.. Obviously.. And that’s the problem with all of science.. My friend.. It misses more than half the human ‘pi’..;)

    Like

    • Nash was neither a psychologist nor an anthropologist. He was a mathematician. He wasn’t trying to explain humanity.

      Liked by 1 person

      • Smiles.. Perhaps if he had become Human his theory would have been grounded in reality.. A little more.. He did base his theory on his observations of humanity that were flawed at core level of what it means to even move.. Per emotion that most warm blooded animals share other than politicians.. CEO’s.. Surgeons.. Shrinks.. And yes.. Nash’s in degrees of science..:)

        Like

        • He didn’t really base his theories on people. They were based on the interactions of rules. That’s why it’s called game theory. They work the same on people, computers or as pure symbols.

          Like

      • Smiles again.. my friend.. rules
        don’t work on truly
        Free humans
        and that’s
        my only
        point… it all
        applies to the
        other overwhelming
        majority of folks
        who follow
        the rules
        of others..
        in other words
        rules don’t work
        the same on all folks..
        but sure.. in general
        in this day
        and time
        they do..
        as we are
        a culture of rules..
        and very little
        REAL
        FREEDOM
        from within
        ALL NATURAL
        per se..:)

        Like

        • Some rules do work on ‘free’ humans (whatever they are).
          See if you can step off a roof and break the law of gravity for instance.

          But game theory doesn’t deal with people. It deals with systems. If the system is straightforward enough and well enough captured by the ‘rules’ of the game it doesn’t matter what individual humans do. Their individuality will be, almost by definition, random. So over the system as a whole it will act as ‘noise’ that tends to have no effect. e.g. The actions of greedy actors will be cancelled out by those of altruistic ones and visa versa. Game theory basically predicts the outcomes the system as a whole tends to produce. Not those of individuals within it.

          Game theory tells you how to play a perfect game of tic-tac-toe, but not whether you’re going to use it against your five year old niece.

          Liked by 1 person

        • Like I said my friend I agree it works for the sheep and to be crystal clear I’m speaking of the rules of dum humans not SMaRt Nature..:)

          Like

  4. And you kNow.. it’s interesting.. My depression was specifically a result of poverty in emotion and it took me 3 years to find a professional who had any grasp on how to get them back.. Eventually I literally showed the first shrink how to do it with art of movement.. He quit his practice and is teaching movement therapy as it is just F in common sense as emotion moves emotions move.. Etc.. A light came on and he said.. Oh yeah.. It works.. Forest Gump moment.. Priceless..:)

    Like

  5. Anyway..
    the modern
    world.. overAll..
    is an F ‘ED
    up place..
    ’cause the whole
    shootin’ match now
    iS out oF balance.. sTill
    social animals are evolved
    to work together for the
    mutual benefit of
    the entire
    tribe.. pack.. whatever..
    works and when technology
    comes.. now.. and the comforts
    of modern society.. folks now gain
    a reality where they no longer
    need each other as a tribe
    to survive.. and sure
    that can
    happen
    as it does
    in Japan.. where
    the young folks are no longer
    interested in Reproduction and
    the elders are cleaned up out
    of their apartments as they
    have zero connections
    in old age for
    anyone
    who
    cares about remains o
    f their welfare.. even if
    the floors come clean..
    and no i am not immune
    to this.. with no real extended
    family in middle age.. and few
    real friends in flesh and blood
    who would likely really
    give a crap iF
    i fall off the
    face of the
    earth other
    than what happened
    to that crazy dancing dude..
    but hey.. at least i left A mark..
    and truly lived.. so far at least..
    i can’t ask for anymore than
    the cat
    who basks
    in the midday
    sun rolling in free
    sands of earth or hugs
    the moonlit grass in
    midnight green
    leaves
    of earth
    Love..
    This is the point..
    from the large cultural
    view it is a large pile
    of crap..
    but from
    the small
    individual
    it can still be
    heaven and bliss..
    that’s my vote.. friend.. Cabrogal..
    and i exercise iT iN EPIC WAy..
    WITH
    wInks..
    And to be clear
    i totAlly agree with..
    your viewpoint here
    and how it relates to
    game theory.. you just
    inspired a ‘iittle’ more
    out of me this
    morning..
    as that
    ain’t
    hard
    to do…
    wInks aGaiN..
    EmotTIoNs are the
    REAL SPARK OF LIVING..
    and i really felt sorry for Nash
    for never truly finding
    them.. it’s a cold place….
    no need
    for economics
    101 with them.. Free..
    at least.. if one is
    financially
    independent..
    from the God of
    D O L L A R..
    yeah life as is
    is
    hard….
    but a
    beach for me..
    with plenty Of
    FReED SaND and
    LeAves oF GrasS..;)

    Like

  6. Nash ‘proved’ the popular (Chicago School) caricature that passes for Smith’s economic theories was wrong because it’s supposedly predicated on the notion that acting for your individual self-interest is, on the balance, beneficial for the group and many of Nash’s game theory models showed that’s not true. Of course Smith wasn’t really that simplistic in the first place.

    But I’ve read that there’s an entirely fictional scene in the movie to do with chatting up a woman in a bar in which Nash claims to prove Smith wrong by observing that having multiple chat-up artists competing doesn’t deliver the best result for ‘the consumer’ (i.e. the woman being chatted up). That’s nothing to do with Nash. It’s Hollywood.

    The most pernicious thing about the movie is that it attributes Nash’s recovery to atypical antipsychotics. As Nash made clear he avoided taking the pills and believed he would never have recovered had he taken them.

    I’m told neither the bar scene nor the claim about neuroleptic drugs appears in the book the movie was based on. I haven’t read the book either.

    One of the reasons I don’t watch many movies is because they so often abuse their source material like that. The worst example I was ever forced to watch (while stuck all night in a local A&E) was the Hollywood travesty of William Craig’s superb history of the Battle of Stalingrad, Enemy at the Gates.

    Liked by 2 people

  7. Thanks.. I didn’t realize that..
    And it’s truly sad it was misrepresented like that in the movie.. As no.. Nash was no Crowe in real life either in looks to even gain the attention of the blonde..:)

    Like

Over to you

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: