Setting up rules so that all parties have the incentives to act in the way the designer prefers

Another year, another Nobel Prize in economics that sounds immediately relevant to multiplayer game design.

Quoting Steven Levitt’s description of Leonid Hurwicz, Eric S. Maskin, and Roger B. Myerson’s work awarded:

The prize was “for having laid the foundations of mechanism design theory.” Mechanism design formalizes ways of thinking about how a social planner, manager, or parent can set up rules so that all parties involved have the incentives to act in the way that the planner/manager/parent prefers. This Nobel is not for the idea that you can design incentives this way, but rather for coming up with ingenious proofs that simplify the task of proving that, indeed, all parties have the right incentives — a task that can turn out to be awfully difficult.

That is, I am sure it is relevant, but my personal experience with game theory is that anything more complicated than the prisoner’s dilemma tends to become so fantastically complicated that designers just design from their own intuitions anyway.

Is anybody actually using game theory for designing video games?

9 thoughts on “Setting up rules so that all parties have the incentives to act in the way the designer prefers”

  1. I guess you are referring back to Schelling’s Nobel prize for his work on ‘rational choice’. (An interesting take on it: http://www.businessweek.com/bwdaily/dnflash/oct2005/nf20051011_3028_db084.htm)

    I have tried many times to use game theory examples to create lively games in the classroom – without too much luck…

    I wonder if game theory works better as a principle than a formal science – the principle being that you can gain a great amount of insight into a situation by simply asking the question “If this was a game, how would you play, and how would you win?”

    – James (The Kryptonite Cafe)

  2. Designers probably do intuitively use game theory but I guess that was not what you were meaning. From what I’ve understood there are people using game theory to set up the rules for bidding for national rights to broadcasting rights and such things, maybe someone should try to make those people design video games?

    And I guess game theory is a better tool to analyze games than to design them, it is probably easier to use it to prove that a dominate strategy exists than to design the absence of a dominate strategy.

  3. I think the problem with using game theory to design games is that it relies on entirely ‘rational behavior’. The truth of course is that players, especially in non-competitive multi-player games, are often irrational.

  4. hey there, I’m a new reader and I like what I see.

    Do you think that designers really AREN’T using game theory? I mean… has anyone actually asked them yet? :P

    Maybe they’re just not telling yet…

  5. To clarify: Most game designers I have met are aware of game theory and use its basic insights, but rarely use game theory for formal analysis of more complicated problems in their games.
    Game theory is incredibly useful as a way of framing a range of game design problems, but formally analyzing those problems using game theory is disappointingly complex.

  6. I’m totally with Charles here, there is no reason to construe all players of games as rational and oriented toward abstract and knowable goals. Perhaps even the players themselves are not totally aware of what ‘incentives’ they might respond to at any given time during gameplay. So why should we use game theory, where almost no attention is paid to the nuance and character of the player him/herself?

    It seems to me that a successful design paradigm can never emerge from consideration of only the game itself as an abstract and discrete object/mechanism. We need to better understand the player to build better games, and what game theory (proper) does is make the assumption that players are rational, calculating bodies without history, personality or desires.

    In game theory, in the end, the game plays you. It is a mechanism that resists and manipulates the players into positions they might not otherwise take. That is why it is so useful for international negotiation, and conversely why as a design paradigm it would fail to create a truly engaging gameplay experience.

  7. I think you are being a bit unfair to game theory – traditional game theory is about optimal ways of playing games (it’s prescriptive, not descriptive).

    And much recent work studies how people actually play games (Behavioral game theory).

  8. You’re right, Jesper, that lots of game theory now is including different kinds of limited rationality and working hard to get to how people really play games.

    Unfortunately, mechanism design–at least the core of it–is based on completely rational players (and a strong notion of rationality, even, since it involves attitudes towards risk and randomness), and it’s often been shown to be wrong.

    One of the basic ideas of mechanism design is that you can find ways in which games are equivalent, and then you can pick one that’s equivalent in the ways you want and also has some other characteristics you want. It’s been shown experimentally that lots of the games which are supposed to be equivalent aren’t played like they’re equivalent.

    So it’s a mess.

    Game theorists are aware of that, and are aiming to improve it.

    I have no idea about game designers :).

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