2011 Abstracts Stage 3

A Questionable Interpretation: a study into John Nash’s Game Theory, its reliance on a dubious interpretation of Adam Smith’s economic theory, and how it has been detrimental to competition in modern day economics

The aim, as such, of this writing is to examine the idea that there is a questionable interpretation underpinning modern economics and if it is attacked we are left with the notion that the economics we have is not the economics it should be. This is because the theory of capitalism that we have today is not exactly the one argued for, by its founder, Adam Smith. I also wish to show that we cannot go back to the more true form of capitalism however nor can we move to any other system because of the damage already done. This shall be hinted at by using some segments of Capital by Karl Marx.

The object which has driven me to examine such an idea that something has gone wrong in economics is the film A Beautiful Mind. I believe the portrayal of John Nash in this film is biased and unjustifiable as I believe his wrong interpretation of Smith may have led to an unending cycle of greed that will slowly pervert and consume any form of morality.

My territories of discussion are economics and the application of game theory and within this writing the concepts that I wish to discuss are: Nash equilibria, game theory and competition.

The thinkers and relevant sources that I shall use within this writing are:

Karl Marx – Capital
Adam Smith – Wealth of nations
John Nash – non-cooperative games and two person cooperative games (contained within issues of Econometrica, the economics journal)