On the Value of Game Theory in Social Science

Abstract

This article discusses the value and limitations of game theory's use in the social sciences. The role of game theory is discussed and contrasted with exaggerated expectations of the subject. The importance of a modeling dialogue between theorists and empiricists is reviewed. The basic limitations of game theory are discussed, including the rationality and intelligence assumptions and the problem of multiple equilibria. The appropriate interpretation of randomized equilibria is illustrated.