SAGE Weston Seminar - 03/18/2021- Roemer

John Roemer Professor, Yale University "A theory of cooperation: John Nash versus Immanuel Kant" Nash equilibrium is the standard concept for equilibrium in non-cooperative games, in which decision makers follow a behavioral ethos of "going it alone." Nash equilibrium also produces social pathologies such as the free-rider problem and the tragedy of the commons. Prof. Roemer will introduce the idea of Kantian equilibrium, in which agents explicitly cooperate instead of going it alone. This mathematical cousin of Nash optimization produces very different outcomes, where free-rider problems and tragedies of the commons evaporate. Clearly, an important question is whether Kantian optimization describes a real phenomenon or is merely a figment of a utopian imagination.