Game Theory and Political Philosophy

One of the more obscure arguments for Rawls’ difference principle dubbed ‘the Pareto argument for inequality’ has been criticised by G. A. Cohen (1995, 2008) as being inconsistent. In this paper, we examine and clarify the Pareto argument in detail and argue (1) that justification for the Pareto principles derives from rational selfinterest and thus the Pareto principles ought to be understood as conditions of individual rationality, (2) that the Pareto argument is not inconsistent, contra Cohen, and (3) that the (...) kind of bargaining model required to arrive at the particular unequal distribution that the difference principle picks out is a model that is not based on bargaining according to one’s threat advantage. (shrink)

We use tools from evolutionary game theory to examine how power might influence the cultural evolution of inequitable norms between discernible groups in a population of otherwise identical individuals. Similar extant models always assume that power is homogeneous across a social group. As such, these models fail to capture situations where individuals who are not themselves disempowered nonetheless end up disadvantaged in bargaining scenarios by dint of their social group membership. Thus, we assume that there is heterogeneity in the groups (...) in that some individuals are more powerful than others. Our model shows that even when most individuals in two discernible sub-groups are relevantly identical, powerful individuals can affect the social outcomes for their entire group; this results in power by association for their in-group and a bargaining disadvantage for their out-group. In addition, we observe scenarios like those described where individuals who are more powerful will get less in a bargaining scenario because a convention has emerged disadvantaging their social group. (shrink)

Social decisions are often made under great uncertainty – in situations where political principles, and even standard subjective expected utility, do not apply smoothly. In the first section, we argue that the core of this problem lies in decision theory itself – it is about how to act when we do not have an adequate representation of the context of the action and of its possible consequences. Thus, we distinguish two criteria to complement decision theory under ignorance – Laplace’s principle (...) of insufficient reason and Wald’s maximin criterion. After that, we apply this analysis to political philosophy, by contrasting Harsanyi’s and Rawls’s theories of justice, respectively based on Laplace’s principle of insufficient reason and Wald’s maximin rule – and we end up highlighting the virtues of Rawls’s principle on practical grounds (it is intuitively attractive because of its computational simplicity, so providing a salient point for convergence) – and connect this argument to our moral intuitions and social norms requiring prudence in the case of decisions made for the sake of others. (shrink)

Bernard Suits is without a doubt one of the most influential scholars in the philosophy of sport. His book The Grasshopper: Games, Life and Utopia (first published in 1978) is a classic and ‘must r...

In The Profession and Vocation of Politics, Weber argues that Machiavelli’s Prince is «harmless» in comparison to Kauṭilya’s Arthaśāstra. Some contemporary comparative political theorists similarly argue that the Arthaśāstra is a fully realistic speculum principis free from moralistic considerations, while The Prince’s supposed realism is in fact moderated by Machiavelli’s republicanism. An opposite viewpoint suggests that Kauṭilya’s extremism, unlike Machiavelli’s republican realism, would breed the sovereign’s ruin in our age. In this article, I take a via media, arguing for the (...) contextual and non-substantive nature of the difference between these authors and their main works. (shrink)

Transitive proxy voting (or "liquid democracy") is a novel form of collective decision making, often framed as an attractive hybrid of direct and representative democracy. Although the ideas behind liquid democracy have garnered widespread support, there have been relatively few attempts to model it formally. This paper makes three main contributions. First, it proposes a new social choice-theoretic model of liquid democracy, which is distinguished by taking a richer formal perspective on the process by which a voter chooses a proxy. (...) Second, it examines the model from an axiomatic perspective, proving (a) a proxy vote analogue of May's Theorem and (b) an impossibility result concerning monotonicity properties in a proxy vote setting. Third, it explores the topic of manipulation in transitive proxy votes. Two forms of manipulation specific to the proxy vote setting are defined, and it is shown that manipulation occurs in strictly more cases in proxy votes than in classical votes. (shrink)

Political theorists study the attributes of desirable social-moral states of affairs. Schaefer (forthcoming) aims to show that "static political theory" of this kind rests on shaky foundations. His argument revolves around an application of an abstruse mathematical theorem -- Kakutani's fixed point theorem -- to the social-moral domain. We show that Schaefer has misunderstood the implications of this theorem for political theory. Theorists who wish to study the attributes of social-moral states of affairs should carry on, safe in the knowledge (...) that Kakutani's theorem poses no threat to this enterprise. (shrink)

*North American Society for Social Philosophy (NASSP) Book Award 2019.* -/- *International Studies Association (ISA) - International Ethics Section Book Award 2021.* -/- Although military mores have relied primarily on just war theory, the ethic of cooperation in warfare (ECW)—between enemies even as they are trying to kill each other—is as central to the practice of warfare and to conceptualization of its morality. Neither game theory nor unilateral moral duties (God-given or otherwise) can explain the explicit language of cooperation in (...) developing and enforcing principles of military ethics and the law of armed conflict. -/- The ethic of cooperation is borne of various motivations: reciprocity, self-preservation, and efficiency, to be sure, but also a sense of warrior honor and concern with human rights. This shared morality can persist despite making it more difficult for one side or the other to win and, unfortunately, its well-meaning motivations often lead to unintended tragic consequences. -/- This book explores three manifestations of this significant yet overlooked ethic of cooperation in warfare: (1) for a “fair fight,” (2) to protect classes of individuals (e.g., non-combatants or prisoners of war), and (3) to end the war quickly. Such cooperation can take unexpected forms, from ad hoc decisions on the battlefield to institutionalization in international law, and is the source of some critical tensions in one of the most significant developments in warfare in recent years: namely, how to handle terrorism or other forms of warfare that lie outside the purview of international law. -/- Each type of ECW raises questions internal to that ethic, such as inconsistencies in the concept of “parity” across different weapons bans, contradictions within the warrior ethic that heavily influence—and therefore confuse—notions of the “fair fight,” the disconnect between what protections a person receives and his responsibility for the war (e.g., political leaders), or the limited decisiveness of outcomes generated by very short wars. -/- Their simultaneous application also generates significant tensions and raises questions about the proper relationship of ECW to the immediate goal of war itself, which is to win, and thus yield either a political settlement or a justicial decision. For example, the ECWs for a “fair fight” and to protect classes of individuals can make it harder to win the war, but even more concerning is that they can also kill more people, which in the latter case contravenes its very purpose. -/- Human history is in some ways the story of trying to concurrently wage and tame war, and the architecture of warfare itself is informed by the ECW, in particular: (a) the political nature of war, (b) the abdication from jus ad bellum judgments in order to concentrate on justice within war (jus in bello), and (c) the ways in which modern nation-states collude to define “legitimacy” in war. -/- The combination of these three features leave questions of justicial right and responsibility for war disturbingly unresolved, it also generates new challenges in a geopolitical context in which cooperative and non-cooperative (e.g. contemporary terrorism) forms of warfare clash. (shrink)

Game theorists tend to model climate negotiations as a so-called ‘tragedy of the commons’. This is rather worrisome, since the conditions under which such commons problems have historically been solved are almost entirely absent in the case of international greenhouse gas emissions. In this paper, I will argue that the predictive accuracy of the tragedy model might not stem from the model’s inherent match with reality but rather from the model’s ability to make self-fulfilling predictions. I then sketch some possible (...) ways to dispel the tragedy, including (1) recognizing some ways the assumptions of the model fail, (2) taking seriously recent work suggesting that increasing greenhouse gas emissions is not in most nations’ own self-interest, and (3) preferring alternative models like collective risk dilemmas, bargaining games, or cooperative models. (shrink)

Local opposition to infrastructure projects implementing renewable energy (RE) such as wind farms is often strong even if state-wide support for RE is strikingly high. The slogan “Not In My BackYard” (NIMBY) has become synonymous for this kind of protest. This paper revisits the question of what is wrong with NIMBYs about RE projects and how to best address them. I will argue that local opponents to wind farm (and other RE) developments do not necessarily fail to contribute their fair (...) share to producing a desirable public good (clean energy). In fact, with landscape concerns being at the heart of much protest, the question of fair burden distribution becomes sidelined: landscape impacts cannot be distributed nor compensated for. Protests may be attempts to express a true conflict of (incommensurable) values. Understanding them as such will help us better address NIMBY concerns and overcome such opposition through ensuring procedural justice. (shrink)

Universal social institutions, such as marriage, commons management and property, have emerged independently in radically different cultures. This requires explanation. As Boyer and Petersen point out ‘in a purely localist framework would have to constitute massively improbable coincidences’ . According to Boyer and Petersen, those institutions emerged naturally out of genetically wired behavioural dispositions, such as marriage out of mating strategies and borders out of territorial behaviour. While I agree with Boyer and Petersen that ‘unnatural’ institutions cannot thrive, this one-sided (...) explanation of universal social institutions in terms of genetic human nature is unsatisfactory. Drawing on the literature on multi-level selection and gene-culture coevolution, I argue that universal social institutions are first and foremost the products of cultural selection. They occupy fitness peaks in the landscape of cultural possibilities, much in the same way that biological adaptations occupy fitness peaks in the landscape of biological possibilities. To show this, I use game-theory. By modelling the domains of social interaction in which marriage, commons management, and property emerged as Prisoner’s dilemma situations, it becomes clear how an institutional framework allows the group to move to an interactive equilibrium with a larger payoff. Institutions do so by incentivising all parties to adopt a cooperative strategy. They are culturally selected ways of optimising genetically constrained domains of human social interaction. (shrink)

The Tragedy of the Commons is often associated with an n-person Prisoner’s Dilemma. But it can also have the structure of an n-person Game of Chicken, an Assurance Game, or of a Voting Games (or a Three-in-a-Boat Game). I present three historical stories that document tragedies of the commons, as presented in Aristotle, Mahanarayan and Hume and argue that the descriptions of these historical cases align better with Voting Games than with any other games.

For contractarians, justice is the result of a rational bargain. The goal is to show that the rules of justice are consistent with rationality. The two most important bargaining theories of justice are David Gauthier’s and those that use the Nash’s bargaining solution. I argue that both of these approaches are fatally undermined by their reliance on a symmetry condition. Symmetry is a substantive constraint, not an implication of rationality. I argue that using symmetry to generate uniqueness undermines the goal (...) of bargaining theories of justice. (shrink)

Although trust and reciprocity are ubiquitous in social exchange, their neurobiological substrate remains largely unknown. Here, we investigated the effect of damage to the ventromedial prefrontal cortex (vmPFC)—a brain region critical for valuing social information—on individuals’ decisions in a trust game and in a risk game. In the trust game, one player, the investor, is endowed with a sum of money, which she can keep or invest. The amount she decides to invest is tripled and sent to the other player, (...) the trustee, who then decides what fraction to return to the investor. In separate runs, ten patients with focal bilateral damage to the vmPFC and control participants made decision while playing in the role of either investor or trustee with different anonymous counterparts in each run. A risk game was also included in which the investor faced exactly the same decisions as in the trust game, but a random device (i.e., a computer), not another player, determined the final payoffs. Results showed that vmPFC patients’ investments were not modulated by the type of opponent player (e.g., human vs. computer) present in the environment. Thus, vmPFC patients showed comparable risk-taking preferences both in social (trust game) and nonsocial (risk game) contexts. In stark contrast, control participants were less willing to take risk and invest when they believed that they were interacting with people than a computer. Furthermore, when acted as trustee, vmPFC patients made lower back transfers toward investors, thereby showing less reciprocity behavior. Taken together, these results indicate that social valuation and emotion subserved by vmPFC have a critical role in trusting and reciprocity decisions. The present findings support the hypothesis that vmPFC damage may impair affective systems specifically designed for mediating social transaction with other individuals. (shrink)

This is the introductory essay to the Italian translation of Matt Ridley's "The origins of virtue", surveying the game-theoretic and evolutionary approaches to the emergence and evolution of cooperation and altruism.

In this Article, I propose a novel law and economics explanation of a deeply puzzling aspect of business organization in market economies. Why are virtually all firms organized as capital-managed and -owned (capitalist) enterprises rather than as labor-managed and -owned cooperatives? Over 150 years ago, J.S. Mill predicted that efficiency and other advantages would eventually make worker cooperatives predominant over capitalist firms. Mill was right about the advantages but wrong about the results. The standard explanation is that capitalist enterprise is (...) more efficient. Empirical research, however, overwhelmingly contradicts this. But employees almost never even attempt to organize worker cooperatives. I critique the explanations of the three leading analysts of the subject (N. Scott Arnold, Henry Hansmann, and Gregory Dow), all of whom offer are different transactions cost accounts, as logically defective and empirically inadequate. I then propose an explanation that has been oddly neglected in the literature, that the rarity of cooperatives is explained by the collective action problem identified by writers such as Mancur Olson. Labor management is a public good that generates the n-person prisoner’s dilemma which gives rational actors the incentive to create it in suboptimal (or no) amounts. I support this by reference to the empirical facts about the origin of existing cooperatives and show that this explanation requires no strong version of a questionable rational choice theory. This explanation is supplemented by the mere exposure or familiarity effect derived from social and cognitive psychology, which turns on the fact that labor managed firms are rare, in part because of the public goods problem, thus unfamiliar, which makes them less attractive and thus more likely to be rare. My account points advocates of labor management towards solutions such as institutional changes in incentives, which, however, themselves involve public goods issues. (shrink)

The aim of this paper is to critically review the game-theoretic discussion of Hobbes and to develop a game-theoretic interpretation that gives due attention both to Hobbes's distinction between “moderates” and “dominators” and to what actually initiates conflict in the state of nature, namely, the competition for vital goods. As can be shown, Hobbes's state of nature contains differently structured situations of choice, the game-theoretic representation of which requires the prisoner's dilemma and the assurance game and the so-called assurance dilemma. (...) However, the “state of war” ultimately emerges from situations that cannot be described by any of these games because they represent zero-sum games in which the outcome of mutual cooperation does not exist. (shrink)

We provide welfarist evaluations of decision rules for federations of states and consider models, under which the interests of people from different states are stochastically dependent. We concentrate on two welfarist standards; they require that the expected utility for the federation be maximized or that the expected utilities for people from different states be equal. We discuss an analytic result that characterizes the decision rule with maximum expected utility, set up a class of models that display interstate dependencies and run (...) simulations for different dependency scenarios in the European Union. We find that, under positive correlations, the welfare distribution tends to be less sensitive to the choice of the decision rule, whereas it can be important under negative correlations. The results that Beisbart and Bovens (SCW 29, p. 581, 2007) have found for two types of models without interstate dependencies are relatively stable. There are exceptions, though, under which the way the welfare distribution is shaped by a decision rule is significantly affected by dependencies. (shrink)

Bicchieri (The grammar of society: The nature and dynamics of norms, 2006, xi) presents a formal analysis of norms that answers the questions of "when, how, and to what degree" norms affect human behavior in the play of games. The purpose of this paper is to apply a variation of the Bicchieri norms analysis to generate a model of norms-based play of the traditional deterrence game (Zagare and Kilgour, Int Stud Q 37: 1-27, 1993; Morrow, Game theory for political scientists, (...) 1994), the paradigmatic model of conflict initiation in International Relations. The deterrence game is modeled here as a sequential decision problem. As such, our analysis is an adaptation of Bicchieri's game-theoretic formalization of norms to what we will call the norms account of the game. We find that the standard account of the traditional deterrence game is a special case of the norms account of the game. We also show that the adaptation of Bicchieri's analysis of social norms yields new and interesting claims regarding when, how, and to what degree norms operate as a constraint on risk-related behavior in the traditional deterrence game. Moreover, we discuss how the results of the model provide testable propositions of relevance to the role of norms in international interactions. (shrink)

Review of Aníbal Sierralta Ríos's book on negotiations and game theory.

In this article, I argue that if one closely follows Hobbes' line of reasoning in Leviathan, in particular his distinction between the second and the third law of nature, and the logic of his contractarian theory, then Hobbes' state of nature is best translated into the language of game theory by an assurance game, and not by a one-shot or iterated prisoner's dilemma game, nor by an assurance dilemma game. Further, I support Hobbes' conclusion that the sovereign must always punish (...) the Foole, and even exclude her from the cooperative framework or take her life, if she defects once society is established, which is best expressed in the language of game theory by a grim strategy. That is, compared to existing game-theoretic interpretations of Hobbes, I argue that the sovereign plays a grim strategy with the citizens once society is established, and not the individuals with one another in the state of nature. (shrink)

I resolve a previously unnoticed anomaly in the analysis of collective action problems. Some political theorists apply game theory to analyze the paradox of anarchy: War is apparently inevitable in anarchy even though all warring parties prefer peace over war. Others apply tipping threshold analysis to resolve the paradox of revolution: Joining a revolution is apparently always irrational even when an overwhelming majority of the population wish to replace their regime. The usual game theoretic analysis of anarchy yields the conclusion (...) that the suboptimal equilibrium of war is inevitable. The usual tipping threshold analysis of revolution yields the conclusion that the optimal equilibrium of successful revolution is possible. Yet structurally the collective action problems of anarchy and potential revolution are much the same. This suggests that tipping threshold analysis and game theory are incompatible methodologies, despite their widespread use in the social sciences. I argue that there is no real tension between game theory and tipping threshold analysis, even though these methodologies have developed largely independently of each other. I propose a Variable Belief Threshold model of collective action that combines elements of game theory and tipping threshold analysis. I show by example that one can use this kind of hybrid model to give compatible explanations of conflict in anarchy and successful revolution.1. Introduction2. Two Classic Problems, and Two Popular Analyses2.1. The paradox of anarchy2.2. The paradox of revolution3. Restating the Puzzle4. Evaluating the Prisoners’ Dilemma and S-Curve Models5. The Variable Belief Threshold ModelExample 5.1. A population of moderates with independent deviationsExample 5.2 A heterogeneous population with independent deviationsExample 5.3 A heterogeneous population with coordinated deviations6. ConclusionAppendix: Computer Simulations. (shrink)

The development of access rights as, perhaps, a replacement for copyright in digital rights management (DRM) systems, draws our attention to the importance of ‚the balance problem’ between information industries and the individual user. The nature of just what this ‚balance’ is, is often mentioned in copyright writings and judgments, but is rarely discussed. In this paper I focus upon elucidating the idea of balance in intellectual property and propose that the balance concept is not only the most feasible way (...) to examine whether past solutions to copyright problems are fair, but it also provides the ability to predict what will be the better solution for all affected parties. Based upon an envy-free contribution towards predicting the efficient balance, game theory is applied in a novel manner to the DRM problem to infer where and what might be the optimal balance in the debate over the nature of access right. (shrink)

Economic logic impinges on contemporary political theory through both economic reductionism and economic methodology applied to political decision-making (through game theory). The authors argue that the sort of models used are based on mechanistic and linear methodologies that have now been found wanting in physics. They further argue that complexity based self-organization methods are better suited to model the complexities of economy and polity and their interactions with the overall social system.

Can social phenomena be understood by analyzing their parts? Contemporary economic theory often assumes that they can. The methodology of constructing models which trace the behavior of perfectly rational agents in idealized environments rests on the premise that such models, while restricted, help us isolate tendencies, that is, the stable separate effects of economic causes that can be used to explain and predict economic phenomena. In this paper, I question both the claim that models in economics supply claims about tendencies (...) and also the view that economics, when successful, necessarily follows this method. When economics licenses successful policy interventions, as it did in the case of the Federal Communications Commission spectrum auctions, its method is not to study tendencies but rather to study the phenomenon as a whole. Key Words: economic models • tendencies • economic experiments • policy making • John Stuart Mill. (shrink)

When students first study expected utility, they are inclined to interpret it as a theory that explains preferences for lotteries in terms of preferences for outcomes. Knowing U($100) and U($0), the agent can calculate that the utility of a gamble of $100 on a fair coin coming up heads is U($100)/2 + U($0)/2. Utilities are indices representing preferences, so in calculating the utility of the gamble, one is apparently giving a causal explanation for the agent’s preference for the gamble.

Being scientific research a process of social interaction, this process can be studied from a game-theoretic perspective. Some conceptual and formal instruments that can help to understand scientific research as a game are introduced, and it is argued that game theoretic epistemology provides a middle ground for 'rationalist' and 'constructivist' theories of scientific knowledge. In the first part , a description of the essential elements of game of science is made, using an inferentialist conception of rationality. In the second part (...) , some ideas for the reconstruction of case studies are introduced, and applied to one example: Latour's analysis of Joliot's attempt to build an atomic bomb. Lastly, in the third part , a formal analysis of the constitution of scientific consensus is offered. (shrink)

The data of Henrich et al., when combined with other research, suggest that sharing behavior probably varies systematically across cultures, situations, and individuals. Economic policies founded on recognition of this “radical contingency” would, I argue, nurture economic pluralism rather than attempting to bring the world under one system.

Economists interpret global environmental quality to be a pure public good. Each country should contribute to its provision. However, this is hard to achieve because each government is tempted to take a free ride on the other governments' efforts. Not only has this dilemma been analysed with game theoretical methods but game theory has also been used to think about how to make amends. This paper reviews the game theoretical discussion on how international policy frameworks may be designed to improve (...) the chances for international cooperation. It is also shown that the evaluation of alternative environmental policy instruments deviates from the standard environmental economics model if applied to the international arena. For the benefit of an interdisciplinary readership, the evolution of the debate on global environmental policy is related to the recent history of economic thought. This history is taken to be materialised in the writings of economics' Nobel Prize laureates. (shrink)

Both terrorism and game theory are contested concepts within the social sciences, but in this paper, I will show that a rational approach (game theory) towards the emotion-laden idea and practice of terrorism does aid understanding of the “terrorist theatre”. First, an outline will be provided on the type of actors (game players) that are, or may be, involved to a more or lesser extend in (supporting) terrorism. Then several game models will be assessed on their applicability. This includes averting (...) the joint bargaining paradox when asymmetric actors cooperate to achieve a joint goal, governments who may fare better from their point of view when dividing up refugees into geographically separate areas to decrease the possibility of cooperation between aggrieved groups and recognizing two-speed negotiations, which can have a (detrimental) effect on (deadline) negotiations. Further, an adaptation of the audience cost model explained the “war of nerves” of the terrorist theatre involving the generation of fear amongst its targets and the updating of information on moderate actors by action of extremists. Several mutations of the Prisoner’s Dilemma were discussed as options to prevent mutual harm. (shrink)

On the orthodox view in economics, interpersonal comparisons of utility are not empirically meaningful, and "hence" impossible. To reassess this view, this paper draws on the parallels between the problem of interpersonal comparisons of utility and the problem of translation of linguistic meaning, as explored by Quine. I discuss several cases of what the empirical evidence for interpersonal comparisonsof utility might be and show that, even on the strongest of these, interpersonal comparisons are empirically underdetermined and, if we also deny (...) any appropriate truth of the matter, indeterminate. However, the underdetermination can be broken non-arbitrarily (though not purely empirically) if (i) we assign normative significance to certain states of affairs or (ii) we posit a fixed connection between certain empirically observable proxies and utility. I conclude that, even if interpersonal comparisons are not empirically meaningful, they are not in principle impossible. (shrink)

This paper critically examines several game theoretic interpretations of Hobbes' state of nature, including Prisoner's Dilemma and Assurance Game, and argues instead that the best matrix is that of a combination of the two, an Assurance Dilemma. This move is motivated by the fact that Hobbes explicitly notes two distinct personality types, with different preference structures, in the state of nature: dominators and moderates. The former play as if in a Prisoner's Dilemma, the latter play as if in an Assurance (...) Game. But when meeting one another, the Assurance Dilemma represents their differing strategies, and can explain various other features of Hobbes' state of nature, as well as a key informational role played the Sovereign. (shrink)

This paper presents a personal view of the interaction between the analysis of choice under uncertainty and the analysis of production under uncertainty. Interest in the foundations of the theory of choice under uncertainty was stimulated by applications of expected utility theory such as the Sandmo model of production under uncertainty. This interest led to the development of generalized models including rank-dependent expected utility theory. In turn, the development of generalized expected utility models raised the question of whether such models (...) could be used in the analysis of applied problems such as those involving production under uncertainty. Finally, the revival of the state-contingent approach led to the recognition of a fundamental duality between choice problems and production problems. (shrink)

If it was a matter of hunting a deer, everyone well realized that he must remain faithful to his post; but if a hare happened to pass within reach of one of them, we cannot doubt that he would have gone off in pursuit of it without scruple..." Rousseau's story of the hunt leaves many questions open. What are the values of a hare and of an individual's share of the deer given a successful hunt? What is the probability that (...) the hunt will be successful if all participants remain faithful to the hunt? Might two deer hunters decide to chase the hare? (shrink)

This book demonstrates that the state-contingent approach provides the best way to think about all problems in the economics of uncertainty, including problems...

Peter Vanderschraaf. Game Theory, Evolution and Justice.

This paper critically reviews Ken Binmore’s non- utilitarian and game theoretic solution to the Arrow problem. Binmore’s solution belongs to the same family as Rawls’ maximin criterion and requires the use of Nash bargaining theory, empathetic preferences, and results in evolutionary game theory. Harsanyi has earlier presented a solution that relies on utilitarianism, which requires some exogenous valuation criterion and is therefore incompatible with liberalism. Binmore’s rigorous demonstration of the maximin principle for the first time presents a real alternative to (...) a utilitarian solution. (shrink)

Abstract Twenty years ago, Tibor Scitovsky questioned the assumption, embedded in neoclassical economics, that human happiness will be augmented if the level of consumption either rises or becomes more uniform over time. Evidence from the 1990?1993 World Values Survey suggests that his doubts were well?founded: although economic gains apparently make a major contribution to subjective well?being as one moves from societies at the subsistence level to those with moderate levels of economic development, further economic growth seems to have little or (...) no impact on subjective well?being. This transition seems to reflect a basic cultural change that results in the diminishing marginal utility of economic growth. (shrink)