Book review: Hidden games

Game theory has a lot of real-world applications. I am never short of good examples to use when teaching game theory in my ECONS101 class. However, I can always use more examples. And so, I was really interested to read Hidden Games, by Moshe Hoffman and Erez Yoeli. The subtitle promises: "The surprising power of game theory to explain irrational human behavior". I set aside the word 'surprising', as I wasn't expecting to be surprised, but I was expecting to be entertained.

And indeed, the book is entertaining. Hoffman and Yoeli use examples from several television series, including The Wire, The Sopranos, and even Star Trek: The Next Generation. I really enjoyed those examples, and many others. At one point, they use game theory to explain Elizabeth's decision about whether to marry Mr Darcy or not, in Jane Austen's Pride and Prejudice.

The overall aim of the book is to explain social puzzles, and Hoffman and Yoeli note that:

To explain all of our social puzzles, we will use game theory, but the game theory will often be hidden and will need to be interpreted through the lens of learning and evolutionary processes.

Moreover, they write that:

One of the premises on which the analyses in this book rest [sic] is that learning, regardless of whether it is from one's own experience via reinforcement or from others' via imitation and instruction, leads us to do what is good for us, at least on average, much of the time.

So, the overall theme of the book is that game theory can explain social puzzles, and that we humans (as well as other animals in some sections of the book) act as if we are solving these puzzles using game theory, and that is because of learning. Given that some of the learning is social learning, this is really an evolutionary argument. And it makes a good story.

The first few chapters are easy to read and follow, and will engage most readers. Even the maths (and game theory can have a lot of maths) is relatively straightforward, and in any case is explained in a way that is easy to understand. However, this takes a turn when the book gets to Chapter 8 where Hoffman and Yoeli introduce elements of Bayesian reasoning (and evidence) into the picture. The maths transitions towards greater difficulty, and the explanations are not as clear. From that point on, I understood the maths but still found the book to be heavy going. Overall, when Hoffman and Yoeli are using narrative examples, the book is good. When they resort to maths, which is all too frequent through the second half of the book, it is not so good. In fact, I think that the book would have been much better if the maths had been excised and the examples explained narratively without the complicated technical details.

I also found several parts where I thought a bit more depth of narrative would have helped. For example, Chapter 7 discusses 'countersignalling' (signalling a positive attribute by not signalling that one has that attribute). However, Hoffman and Yoeli don't explain how it is that someone without the positive attribute couldn't simply pretend to be countersignalling. 

This is a good, if somewhat uneven book. A game theory enthusiast would certainly enjoy it, as will the more maths-inclined reader. Those without a good understanding of maths will probably be turned off by that aspect of the second half of the book which, although understandable, is a bit of a shame.