Thoughts on Starting to Read Prisoner's Dilemma

I just bought Prisoner's Dilemma by William Poundstone and have started to read it. It combines a description of mathematical game theory, history of its development and applications, and biographic information on people such as John von Neumann and John Nash. It looks pretty good so far.

I did study game theory a long time ago, and am a fan of RAND where it was used extensively in real-life applications. Its application is an example of how analysis can build upon data to contribute to understanding and indeed to create new knowledge.

It was conceived of as a means of formalizing situations in which people make decisions the results of which incur costs and benefits, and in which people bluff, lie, and try to psych each other. Poker comes to mind as an example of a fairly innocuous game to which it might apply. Of course the military was interested as the techniques of game theory could be applied to the battlefield.

It occurs to me that one of the problems in applying game theory is that in the real world, people are "playing many games at once". Thus our President is conducting two wars simultaneously. He is also conducting foreign policy all over the world. He is responsible for the country's international economic policy, and its environmental policy. He is negotiating with allies to help in all these "games", and with opponents to limit their threats. He is also negotiating with the other two branches of government. He is involved with others in the leadership of his party to determine the directions that the party will take, and is involved in the competition with other parties.

Moreover, all the other people with whom he is negotiating are similarly involved in different roles in a large number of "games". When someone make a public statement, he may be lying or bluffing, in error, or telling the truth as he sees it. But his reasons for the remark may be based on any one of or combination of the roles he is playing in the games.

I think this model may help in situation analysis. Lets ask of a statement, what are the various games in which the speaker is involved, the stakes in each, and the rules of those games.

The approach may not only be useful in analyzing what government pronouncements mean, but also in our personal and business dealings.