Home > Uncategorized > Game Theory and Operations Research lacked substantiated applications in social, political and economic fields.

Game Theory and Operations Research lacked substantiated applications in social, political and economic fields.

from Richard Vahrenkamp

Since 1945, the United States had experienced a unique innovation push with the computer, the nuclear weapon, new air combat weapons and the transistor within just a few years. These innovations were accompanied by Game Theory and Operations Research in the academic field. Widely–held is the view that computers supplemented the mathematical concepts of Game Theory and Operations Research and gave these fields a fresh impulse. Together, they established the view of the world as a space of numbers and introduced quantitative methods in economics, political science and in sociology. A series of conferences on these subjects settled this new view. They imparted Cold War science and technology policy with a unique flavour of progress, superiority and modernity.

Whereas the history of quantitative methods has been mainly written as a history of digital computers, the history of Game Theory and Operations Research has had only a small number of contributions. In the issue 83 of Real World Economics Review Bernard Guerrien and Lars Pålsson Syll published 2018 critical contributions to the current state of Game Theory: Syll criticised the rational choice theory and Guerrien doubts whether Game Theory could be applied to real world problems.[1] My approach here is a history of science approach that reveals the artificial content of Game Theory and Operations Research in the Cold War science context. In addition as a sociology of science approach, I characterize these theories as an expert movement of mathematicians. This paper deconstructs the current success stories and shows that Game Theory and Operations Research were not only related to the Cold War scenario in the nominal sense, but lacked substantiated applications in social, political and economic fields, and remained a branch of applied mathematics.

http://www.paecon.net/PAEReview/issue88/Vahrenkamp88.pdf

  1. Robert Locke
    August 3, 2019 at 11:22 am

    Nominal science without data – the artificial Cold War content of Game Theory and Operations Research

    Richard Vahrenkamp

    Richard, it is hard to believe that you could overlook my book, published 30 years ago in your analysis of the reception of Game Theory and OR. Chapter II. The New Paradigm Revisited is particularly focused on how OR methodologies were being questioned even by or scientists themselves. In 1989, I was asked to give a talk at the School of Management in Trinity College; I had told Bill Kingston, who had invited me to give a talk, that OR had considerable doubts about its methodologies. At a dinner table, with many of the management professors attending, Kingston address the head of OR directly, asking “Professor Locke believes that OR had a sort of ‘nervous breakdown’ about its methods in the late 1970s, is this true?” I was embarrassed, at being singled out in this way. The OR professor, after a pause, with everybody looking at him, replied “yes.” We were talking in particular about Russel Ackoff’s “The Future of OR is past,” published in the journal of operational research in 1979.

    • Robert Locke
      August 3, 2019 at 11:40 am

      The book in quesion is Management and Higher Education Since 1940, 1989, Cambridge University Press, Chs 1, The New Paradigm and 2. The New Paradigm Revisited,” which concentrates on operational research, esp. pp. 30-40.

      • Yoshinori Shiozawa
        August 8, 2019 at 11:52 pm

        Robert Locke, thank you for the information. Your book seems to present a new field of study for philosophy of social sciences.

      • Yoshinori Shiozawa
        August 9, 2019 at 8:42 am

        Robert Lock, do you know a paper or book that treated more recent movement? Your book is dated 1989. Thirty years has already passed. I want to know what happened after that.

  2. Robert Locke
    August 4, 2019 at 12:59 pm

    Sorry to pick on you, but do not put too much emphasis on the Cold War. I’m aware of the arguments, but they ignore the epoch making work of the French economic-engineers in the postwar period. See my book, Management and Higher Education Since 1940 and their contribution, pp 127-129, and my article in the rwer on the reform of finance education in the business schools. “Reform of Finance Education in US Business Schools,” issue 58, Dec. 2011, especially pp.. 95-99. Maurice Allais wrote that France had the most advanced operational research post WWII, not the US or Britain. The main reason for French excellence was educational, the ingenieur-economiste in the Ecoles de Mines, and the challenge of postwar French infrastructure reform.

  3. Yoshinori Shiozawa
    August 9, 2019 at 12:15 am

    Dear Richard Vahrenkamp
    I am perfectly persuaded that Game Theory had no practical applications to the real world.

    How do you think about the use of Game Theory in economics itself? For example, how do you consider Masahiko Aoki’s The Co-operative Theory of the Firm, Oxford University Press, 1984? This book was published in Japanese under the title The Modern Firm: Law and Economy Seen from Theory of Games. His later works draws heavily on Game Theory and so his followers later works. These are no direct applications of Game Theory to the economy, but we may say that Game Theory had contributed to thick understanding of the economy or the nature of firms.

    • Robert Locke
      August 12, 2019 at 8:48 am

      When firm centered instead of market-centered perhaps game theory has more prescriptive value.

    • Robert Locke
      August 12, 2019 at 10:42 am

      Yoshinori, I discuss Masahiko Aoki’s comparative theories of the firm, i.e., agency, J-firm, H-Firm, to which I added a G-Firm (German) in the last chapter of (1996)The Collapse of the American Management Mystique, Oxford UP. The chapter is called “Quo Vadis,” the pages which cover the discussion, 241-50. I’m curious what you think about this attempt at prediction done 25 years ago. Did I fail in prognostication, or did I “understand” what was going on better than others a quarter of a century ago.

      • Yoshinori Shiozawa
        August 20, 2019 at 9:35 am

        Robert Locke
        Sorry! I haven’t noticed this post for a long time. Would you like to send me an e-mail to y@shiozawa.net? I have something to send you.

  4. Yoshinori Shiozawa
    August 10, 2019 at 5:23 pm

    Another question to Richard Vahrenkamp.

    You have always telling that the textbooks of OR, examples are always imaginary, fictive ones. You must be right. But, if I am a textbook author, I will take the same method. To employ a actually applied case, it would be necessary to give a huge list of numbers and it is hard to show any principles that we should keep in mind when we attack a real problems. It is more natural to take an imaginary simple example that makes readers understand the principles. Have you checked journals of engineering?

  5. Robert Locke
    August 12, 2019 at 8:43 am

    I discuss the topic again, with an emphasis for the first time on Japan, in (1996) The Collapse of the American Management Mystique, OUP, with results on my 1980s investigation of Japanese management in this book Ch. 3 “Japanese Self-Absorption, Japan’s Management during High Growth Industrialization and Globalization (1960-1985),” 144-157. I learned very much from H. Thomas Johnson, who was drawn into studying the Toyota Kata, (Relevance Regained: From Top Down Control to Bottom-Up Empowerment; H. Thomas Johnson and Anders Broems, eds. (2000) Profits Beyond Measure. Johnson, who had connections with the Association of American Manufacturing Excellence, dominated by engineers in US academia, steered me to Germans who were studying the management of Japanese Manufacturing Process. The emphasis was firm not market centered,which is probably one reason why economics in anglo-saxonia ignored it. I also, at Johnson’s suggestion (he wrote the book’s introduction), read Mike Rother’s (2010)Toyota Kata, Managing People for Improvement, Adaptiveness, and Superior Results. and the works of Jeffrey Liker, and others on the Toyota Kata and lean management movement.

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