Back in the 1950s at the height of the cold war, President Truman got an alarming piece of advice from the scientists at his military think-tank, the RAND corporation. The Soviets have nuclear capability, they said, we have nuclear capability, better nuke them before they nuke us. This, according to game theory, their latest piece of mathematical wizardry, was the only rational course of action. While an agreement not to push the button would benefit both parties, cooperation is also the riskiest strategy because you stand to lose everything if the other guy gets in there first. Better, then, to act - and hang the consequences.
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Game theory was the first real attempt to understand decision making in mathematical terms. Its architect, the mathematician John von Neumann, was influential at the RAND corporation in the 1950s, and an ardent supporter of the pre-emptive strike, based on his belief that humans act as "rational agents". Since then, however, numerous studies have shown that people simply don't behave in real life as his mathematical models predict. In the game called the prisoner's dilemma - which is analogous to the situation that Truman faced - the maths says that two rational players should not cooperate for a reward if they stand to gain a bigger reward by "defecting". That's because even though the game is rigged so that if both players defect the payout is minimal, it is in their interests to do so because they will receive nothing at all if their partner defects and they do not. Yet, countless repetitions of this game in psychology and economics laboratories worldwide reveal that if the same two players play repeatedly, their strategies evolve into a complex mix of cooperation and defection. Von Neumann got it wrong - people do not behave rationally...
Clearly we include social and emotional effects, not just material gains, when we weigh up the costs and benefits of various courses of action open to us as individuals. We recognise that defecting carries a social risk, especially when it takes place in public or in front of somone you know. The view now seems to be that von Neumann's view of rationality residing inside your head is wrong - it is in the interaction between people acting socially - and that social context has a huge impact on our decision making thought processes.
This is based on New Scientist 31/07/04 (subscription required). The article goes on to deal with brain imaging using MRI etc to investigate the thinking process. However these ideas of rationality in our social relationships also raises other interesting issues about politics. It seems to give the lie for example to the political view that we are selfish actors only looking out for ourselves and certainly to Margaret Thatcher's nonsensical statement that 'there is no such thing as society'
