<center><H1> Preface to The Games and Information Reader

Preface to The Games and Information Reader

(September 16, 2000/May 27, 2004)

Eric Rasmusen


Professor of Business Economics and Public Policy and Sanjay Subhedar Faculty Fellow, Indiana University, Kelley School of Business, BU 456, 1309 E 10th Street, Bloomington, Indiana, 47405-1701. Office: (812) 855-9219. Fax: 812-855-3354. Erasmuse@indiana.edu. Http://www.rasmusen.org/.
Good tools are half the battle; any repairman will tell you that. The home handyman has a garage full of tools, gadgets, and specialized gewgaws for two reasons. One is that they're beautiful in construction, fascinating in design, and thrilling to use. The other is that they're cost-effective. In America, capital is cheap and labor is expensive. Any tool that saves a skilled worker two hours of labor, or an unskilled worker ten hours over its lifetime is worth buying. And if you are a self-employed professional, no matter how poorly paid, you will also want to buy top quality.

Top quality does not mean top complexity. This year I bought the Sears Craftsman 6-Inch Pocket Socket adjustable box-end wrench shown in Figure 1. This tool should be a model for us all. It is adjustable, replacing an assortment of fixed wrenches and removing the need to figure out which is which. Adjusting it is not only possible, but easy, and the handle coating makes it a pleasure to heft. It is simple in construction, and of good materials-- which means it will be durable. Sears offers a lifetime guarantee, and means it. The wrench is even offset slightly, a nice touch for avoiding scraped knuckles, and has a hole in the handle for hanging from a nail.

Figure 1: The Pocket Socket

Yet the Pocket Socket was not invented until 1989. Why not? As far as I can tell, its materials (except perhaps for the handle coating) and construction were feasible in 1789. The need has been there for quite some time. There was even profit to be made-- Mr. Richard Cones, working for Midwest Tool and Cutlery, was able to acquire U.S. patent 4,967,613 and make a deal with Sears to distribute it.1 Why did this invention come only after almost five million others? I don't know.

Students and scholars should meditate on the pocket socket. It shows that there are still simple discoveries to be made long after the best minds in the business have acquired fancy theoretical university training and been agonizing over useless frontier projects. (This is not to say, however, that Mr. Cones did not have fancy training, or did not need it to come up with his simple idea!). A corollary is that when superior new tools are discovered, that does not necessarily make life harder, and students should be especially happy about them. The pocket socket allowed me to discard several other tools, and I can abandon my vain quest to learn how to tell at a glance whether a nut size is 1/4 inch or 11 millimeter. Game theory is much the same. The new way of thinking has made life easier, not harder.

The tools of game theory will save you a good deal of effort if you know which tools you need and if you have acquired them and stored them close at hand. That is why a Ph.D. advisor can after ten minutes of casual discussion find a flaw in a student dissertation that it would take the student twenty hours of scrawled algebra to uncover.

This book does not contain the magical tools of the ideas of game theory. (Those are in my other book, Games and Information .) It does, however, contain more humble tools that should be in your kit. Essentially, it is a stripped-down, cleaned-up version of the readings packet I use in my game theory course at Indiana University. I doubt anyone will march through and read all of these articles. Rather, you will put your hand into the toolbox and select an item that you need now or think you will need in the future, or just think looks fun to heft and to twiddle.

Books are the tools of the scholar's trade, and he should lay in a good stock of them, even if he hasn't much money. (Remember Erasmus: ``When I get a little money I buy books; and if any is left I buy food and clothes.'') In particular, anybody who liked Games and Information should buy this book. Like that book, it is deliberately eccentric, and you will find things here that you will not find elsewhere. The ``Notes on Writing'' alone are worth the price of admission. I expect the readers to be a diverse crowd, ranging from political science professors in Macao to economics undergraduates in Boston.

I've included only readings that are interesting and useful to read, leaving out some undoubted classics that I would not recommend for current reading. Thus, I have omitted the following very important articles, to which a historian of thought would have to devote much careful reading:

There exist other collections of articles on game theory which have a mixture of classic and readable articles, two categories which do, of course, overlap. They include: What I've included is a combination of readings that would be recommended by every teacher of game theory and readings that probably none of them but me know. I've inclined towards articles not published in easily available book or journals, such as Ariel Rubinstein's 1979 article, ``An Optimal Conviction Expectation Regime for Offenses that May Have Been Committed by Accident,'' which appeared in Applied Game Theory . And I've included newspaper articles and cartoons, not for relief from hard thinking but rather for the opposite reason. The hardest part of game theory to learn is which tool applies to which situation, and the way to learn that is by practice.

Quite a lot of the material is about how to do research. An example is the old but good item by Harry Roberts and Roman Weil, ``The University of Chicago. Starting Research Early.'' There is also some history that I think good for inspiration and direction in how to think about research, such as the book chapter by Sylvia Nasar, "School of Genius (Princeton, Fall 1948)." If you aren't at a department like 1948 Princeton mathematics, try creating one. It's not just the brains, which you can't replicate-- the style matters just as much.

The Net, of course, is reducing the advantage that scholars at top departments in crossroads such as Chicago and Cambridge have over the rest of the profession. As an example, let me use this very book. It has a web page up at Php.indiana.edu/www.rasmusen.org/GI/gireader.htm at which I may post items of interest to readers. Just as important, though, I invite you to use the Games and Information Bulletin Board that I have set up at Pacioli.bus.indiana.edu/erasmuse/GI/bbs.htm. If you have any comments on the readings in this collection, or any new articles, clippings, or cartoons you think might be of interest, please let me know there or at my email address, Erasmuse@Indiana.edu.

Eric Rasmusen
Kelley School of Business, Indiana University, Bloomington, Indiana
September 16, 2000.

Footnotes

1 Go to the U.S. patent office site and search by patent number. Www.uspto.gov/patft/index.html. Sears's description of the Pocket Socket can be found by searching for that name at Www.sears.com