Micromotives and Macrobehavior summary

So what’s the best way to understand human behavior? One powerful method is to look at group behavior – why masses of people behave in a certain way. And the best way to look at this is through a model.

A model is a simple description of how complex systems work. For example, the critical mass model can explain why some social innovations succeed, and why others don’t – for example, why some political movements fail, and others collapse altogether.

Have you ever played the game musical chairs? Unless you change the rules, every turn ends the same: all but one of the players are left without a chair.

This childhood game serves as a metaphor for closed systems, where the overall result remains the same even after changes. In musical chairs there are gradually fewer and fewer players, but the end of each turn has the same result.

Everyone accepts the fundamental value of freedom. But fewer people accept that sometimes freedom can limit us. This can be best explained by the most famous thought experiment in game theory: the Prisoner’s Dilemma.

So what is the Prisoner's Dilemma?

Some people are great athletes, some not so much. Yet members of any single sports club usually play at about the same level. Why does this happen? How do people end up in a club which just fits their skill level?

Because people like to be both good at what they do and feel challenged.

What kind of city do you leave in? Most North American cities consist mainly of residential areas, which are either nearly all white or black. Only a small fraction of neighborhoods have a population which doesn't consist of more than three quarters of one race. Why is that so?

Because even a mild preference for having similar neighbors can cause segregation.

Imagine if you could choose your children’s sex in advance. Or even their musical talent, or IQ. What would the consequences be?

It would allow you to create the child of your choice – but it would also create new areas of conflict between you and your family.

In 1960, the British novelist, scientist and politician C.P. Snow declared that nuclear war was a "mathematical certainty" that would erupt within a decade – unless the nuclear powers drastically reduced their armaments.

Despite this warning, nuclear arsenals around the world have increased multiple times, and new powers have entered the nuclear game. But fortunately, this “mathematical certainty” did not occur.

The key message in this book:

Economic models, and especially game theory, can be effectively used to explain social behavior. By elucidating the links between individual and group behavior, game theory can help us take control of the complex situations that involve us all – for the better.