RAND and Game Theory

Game theory is the idea that games can be used in order to understand, and predict complicated human behavior. The idea first came under intense study in the late 1940s and early 1950s. John Williams, one of the founding fathers of the RAND corporation, was fascinated with the idea that game theory could help American analysts to calculate the possible Soviet responses in the event of a nuclear conflict. RAND would hire the foremost thinkers in Game Theory including John von Neumann, the author of Theory of Games and Economic Behavior, John Nash, as well as list of prominent economists.1

The classic example of a game in game theory is one that presupposes that two bank robbers have been arrested. They have stashed the loot and they are the only two who know where the money is hidden. Each is held separately and told by the District Attorney that if he confesses, rats on his partner, and tells where the loot is stashed, he will go free. If both partners confess, they will both end up getting reduced time (two years in prison). If neither confesses, there will be insufficient evidence to convict either one and they can later rendezvous and split the money.2

The consequences of the various decisions can be interpolated to the nuclear question. For RAND the question was what would the Soviets do if both sides have nuclear weapons? If both sides cooperated the results would be a peaceful world. But since both sides had difficulty trusting each other, either one might be prompted to make a pre-emptive strike to ensure their own survival. This prompted the people at RAND to advocate that the United States have a second strike capability that would ensure that the Soviets would be punished if they should make an unprovoked attack. This led to the idea of mutually assured destruction, which proved to be sufficient deterrent for conflict for over 40 years.

< The Origins of the Rand Corporation LeMay, Collbohm, Arnold | Systems Analysis at the RAND Corp >

  1. Soldiers of Reason, by Alex Abella, Harcourt, 2008, p23 Available at Amazon
  2. UCLA on Game Theory

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