Crime and Punishment: Are One-Shot, Two-Person Games Enough?

Abstract

George Tsebelis argued in the March 1989 issue of this Review that decision theory is completely appropriate for analyzing games against nature but not appropriate for dissecting games against a rational opponent. Analysts who mistake a rational opponent for nature in constructing models commit what Tsebelis calls “the Robinson Crusoe fallacy.” In this controversy, William Bianco and Peter Ordeshook attack components of Tsebelis's argument. Bianco believes the model should be set up as an iterated, rather than a one-shot, game. Ordeshook feels that proper modeling cannot rely merely on two-person games and, in addition, he argues that Tsebelis commits some technical errors. In his reply, Tsebelis joins the issues and buttresses his original analysis.