A government can force its citizens to cooperate and
to obey the law. It can enforce this cooperation. This is often called
a Hobbesian dilemma. It arises even in a population made up entirely of
altruists. Different utility functions and the process of bargaining
are likely to drive these good souls to threaten to become egoists
unless other altruists adopt their utility function (their preferences,
their bundles).
Nash proved that there is an allocation of possible utility functions
to these agents so that the equilibrium strategy for each one of them
will be this kind of threat. This is a clear social Hobbesian dilemma:
the equilibrium is absolute egoism despite the fact that all the
players are altruists. This implies that we can learn very little about
the outcomes of competitive situations from acquainting ourselves with
the psychological facts pertaining to the players. The agents, in this
example, are not selfish or irrational - and, still, they deteriorate
in their behaviour, to utter egotism. A complete set of utility
functions - including details regarding how much they know about one
another's utility functions - defines the available equilibrium
strategies.
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