This is the scene where John Nash finally discovers the revolutionary idea he's been searching for, Governing Dynamics (or what is now known as Nash Equilibrium). However, the movie completely misrepresents the concept.
"Adam Smith needs revision. If we all go for the blonde, we block each other - not a single one of us is going to get her... What if no one goes for the blonde? We don't get in each other's way... It's the only way we win.
The best result will come from everyone in the group doing what's best for himself... and the group. Adam Smith was wrong."
So there we have it. The theory of the Invisible Hand has been demolished. Well, at least that's what some bloggers across the web have claimed, based on this clip.
In reality, Nash's theory of Governing Dynamics was not meant to be a critique of Adam Smith, nor was it a recommendation for social organization. It's simply a theory that can be used to predict the outcomes of certain situations.
In other words, Nash wasn't saying, "We need to consider the group, not just self-interest." Nash was saying that human action *IS* influenced by the actions of others. In the clip, it is in everyone's self interest to not go for the blonde. It has nothing to do with concern for the overall group. An individual from the group must simply take into accord the actions of the others in the group, in order to make the correct, self-interested decision.
Nash was not concerned with how society should function. His theory deals with the reality of self-interested human action.
I just needed to get that off my chest. Carry on.
I just needed to get that off my chest. Carry on.
Have you wonder why banks are so succefull . Why they make all that money. Its because they work together. Elites teach you to be individualistic , they divide people , so they can keep going to the bank . Goverment and corporation are working together
ReplyDeleteI'm not great at math, but I'm self-taught, fluent in four languages and a professional editor. You, on the other hand, appear to struggle with literacy. No offense intended. Does anyone know of a theory of mind that explains the seeming incompatibility of left and right brain capabilities? I would love to better understand it.
DeleteFrom Bru (India)
ReplyDeleteDear Mr.Tyler,
Thank you for clearing this up. I have gone over the scene several times and formulated my own, clearly, erroneous conclusions. I checked the history of the movie, Prof.Nash's theory and Adam Smith's postulations to see if Prof.Nash had indeed criticized Adam Smith. Clearly the scene is no reflection on Adam Smith's genius. I am also beginning to wonder how long will the theory of governing dynamics hold? Family relations for instance seem to have under-studied in this model. The case of Ambanis of India come to mind. But all said, it would not be surprising if Prof.Nash's theory covered even the basic family relationships with respect to profit-loss motif.
Well it is equivalent in the end. It is definitely a critique of the maximization of profit. Every actor in the group actively has to decide to not pursue maximum profits or the maximum outcome. This IS different than the traditional game scenario. It's maximum profits or gains vs sustainable profits and gains. Nash was saying that equilibrium could be established if people sought sustainable profits and that if people sought maximum profits this would eventually create an endgame scenario- locking of the game. Of course in reality it is a bit more complicated than just this game. But the idea of sustainable profits vs maximum short term profits is still a viable debate.
ReplyDeleteIn other words, Nash was saying that in theory, Marxism/communism is a superior and more sustainable economic model for society than unchecked Capitalism.
DeleteSmiths theory was in general the belief that acting in ones best interest persuant your goals& applying your best effort would ultimately be a benefit to the group as a whole if im understanding it correctly ? Where as nashs there contends that efforts applied to ones best interest as well as the interest of the group would yealed the best outcome if i understand the premise? However i contend in todays information age as well as the abundance of miss information the perseption of the group is a contributing factor to the outcome in effect nashs theory would have to be revised because there is no common knowledge to be drawn as a conclusive starting point for the group to determine best course of action ??
ReplyDelete"In other words, Nash was saying that in theory, Marxism/communism is a superior and more sustainable economic model for society than unchecked Capitalism." Incorrect!! Marxism/communism by their very nature are tyrannical. The first is based in the destruction of individual freedoms to do what is best for themselves in order to instill a society that's sole purpose is forcible adherence to a society that is only interested in maintaining that society at the loss of individual freedom. Show me a sustainable communist society! It seems to me that what is being said is freedom to achieve wealth for yourself you need to keep in mind that your achievement doesn't destroy other people's possibility of achieving the same! That's where in the modern America we live in we have gone wrong. Especially where politics, ideology religion or lack thereof are concerned. When political power and financial power are in the same basket, all the other baskets have very little!
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