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Is life a game theory equation?

  • Published at 06:20 pm March 10th, 2018
  • Last updated at 12:08 pm March 11th, 2018
Is life a game theory equation?
I was talking to one of the top students at my college who works in development. I was thinking about my career and considering an interview offer at USAID, and contemplating my overall life purpose. As a naïve fresh graduate, her opinion was valuable. As inconceivable as it sounds, she had mixed feelings even after getting paid a good lot for an economics graduate in Bangladesh. Her co-workers, being East Asians, seemed to dislike her writing ability, despite the fact that she has been an appreciated yearbook writer, model UN president, and co-founder of a famous policy think-tank in college. To make herself understandable, she had to simplify her much celebrated linguistic prowess. My comment on the matter, in economics jargon, was: “That’s depreciation of your calibre.” Now, if you did not understand the last sentence, you better open your macroeconomics textbook and re-learn the topics covered in Solow Growth Model and the Golden Rule of Capital. We also were talking about our constraints, and how we can make a way out for our post-graduation life. Paying for Ivy League universities would rob us blind, and there is no guarantee that getting an Ivy degree would necessarily bring increasing returns to our monetary fortune. As elder children of the family, we had similar constraints, and that’s why we see the matter from similar perspectives. With the intention of gathering knowledge and learning economics rather than getting a degree, I opted for her suggestion. Her exact words to me were: “Some of us have too many constraints, which hinder us from pursuing our dreams. Just remember that there are other ways to get there. And only you can decide your most optimal path.” Perplexed, I started pondering whether our whole life was a game theory equation. If so, then are we really being to find our Nash Equilibrium where there is no incentive to deviate? My senior year roomie once uploaded a display picture with her husband with the same caption. Call it plagiarism if you will, but I am referring back to the source. Finding a purpose, and working where your heart wants you to, is a blessing in itself. More so in Bangladesh, where getting a job is tougher than your toughest course final.
Finding a purpose, and working where your heart wants you to, is a blessing in itself. More so in Bangladesh, where getting a job is tougher than your toughest course final
After much thought and after-thought, I came to the conclusion that life is indeed a game theory equation. Every step of the way, there are trade-offs, externalities, and opportunity costs involved -- be it considering a spouse, having children, professional performance, or even hiring a nanny. The best way to make a rational decision is by analyzing the overall scenario through a speculative critical lens considering impromptu situations of adverse selection and moral hazard. If a person’s birth is a root node of his/her game tree, then at every decision node, the stake-holders involved are the players, and the decision taken has to be a dominant strategy, not a dominated strategy, be it marriage, divorce, career, children, etc. Now, whether the outcome/payoff of the decision will be incentive compatible or not is something only time will tell. If not, then they will be stuck in a prisoner’s dilemma -- not being able to co-operate with each other despite being distinctly rational in their individual stand-points. This is particularly important for upper-level government, business, and development leaders when they are making a decision for their respective countries, business deals, partnership ventures, and international affairs. So much logic and rationale, but where did the emotions go? Balancing between your budget constraint and indifference curve will give you the maximum satisfaction. You only draw an indifference curve at that point of time when you are genuinely happy about your life. As being your only solo competitor in this world, this will give you the absolute advantage -- just like international trade. Just make sure that you are not left with your last resort/dominance solvable strategy in your life game, and that your personal growth trajectory does not illustrate a diminishing marginal orientation towards self-actualization, given ceteris paribus holds in other spheres of your life. Maisha Mehzabeen works at the Dhaka Tribune and is a graduate in economics.