MAKING SENSE -- July 10, 2013 at 12:38 PM ET
Gaming Mr. Darcy: What Jane Austen Teaches Us About Economics
UCLA Professor Michael Chwe believes reading Jane Austen, as this man does in Bath, England, to celebrate the 200th anniversary of the publication of "Pride and Prejudice" in January, can inform our understanding of strategic thinking. Photo courtesy of Matt Cardy/Getty Images.
Paul Solman: Game theorist Michael Chwe made quite a splash here recently with a post encapsulating his new book "Jane Austen, Game Theorist." Freakonomics recently picked up Chwe's thesis, and we thought this was a good time to let Chwe respond to his many commenters.
Michael Chwe: Marriage came up consistently in reader comments to my first post on this page, which wasn't surprising given the plot lines of Austen's novels. But how do we explain who marries whom? Do 21st century university professors have anything to add to 19th century novelists? Or might there be a synergy between us?
Everyone, from Austen to contemporary academia, is interested in the question of marriage. Evolutionary biologists examine animal mating generally. Psychologists prefer to analyze sexual attraction. Sociologists study how singles meet others of similar socioeconomic backgrounds. Political scientists see how government policies encourage or discourage marriage. The inescapable conclusion: there is no single "best" way to explain who marries whom. So why not use more than one?
A game theorist like myself begins with the economic premise that human beings make individual choices based on their reckoning of the costs and benefits. It is a premise that, I argue, Jane Austen obviously shares.
In "Pride and Prejudice," for example, when Jane Bennet wonders whether she should marry Mr. Bingley, even though his sisters dislike Jane, her sister Elizabeth Bennet advises, "If, upon mature deliberation, you find that the misery of disobliging his two sisters is more than equivalent to the happiness of being his wife, I advise you by all means to refuse him."
For Austen, then, the choice of a spouse is a matter of tradeoffs, which can only be measured in terms of (often subtle) costs and benefits.
But choice itself is all-important. Consider another example, this one from Austen's "Sense and Sensibility." Edward Ferrars's family plans for him to marry the wealthy Miss Morton. After his family disowns Edward for his secret engagement with Lucy Steele, they plan for his brother Robert to marry Miss Morton. Elinor Dashwood remarks, caustically, "The lady, I suppose, has no choice in the affair."
In other words, the Ferrars family thinks about marriage in terms of advancing the family's wealth and social class (which is still relevant today), but Elinor Dashwood thinks that marriage should be a matter of choice -- the woman's choice.
There are, of course, other factors to consider in explaining how the human animal winds up with a mate. Sexual attraction is important and is presumably not a matter of "choice" in the sense we use the word. Many novelists analyze how sexual attraction begins and develops, but Austen does not pursue this line of inquiry. For Austen, initial attraction is not terribly interesting.
For example, in "Mansfield Park," Edmund Bertram is drawn to Mary Crawford, but it's hard to argue he has much contemplated the matter.
"A young woman, pretty, lively, with a harp as elegant as herself; and both placed near a window, cut down to the ground, and opening on a little lawn, surrounded by shrubs in the rich foliage of summer, was enough to catch any man's heart," he says. Mary Crawford's response is equally mundane: "He pleased her for the present; she liked to have him near her; it was enough."
I do not think that Austen -- or any game theorist for that matter -- would say that an analysis of marriage in terms of individual conscious choice will result in a complete, overarching, theory of marriage. But a strategic perspective on marriage, which analyzes how individuals make choices, from introduction to courtship to proposal, can be developed and refined, and I think that this is one of Austen's objectives. As a game theorist, it is certainly one of mine.
The more refined a strategic perspective, the more usefully it can be combined with other perspectives, even those that study our involuntary impulses. For example, if you think you can increase another person's sexual attraction to you, should you do so earlier or later?
This quite practical question requires both strategic and psychological perspectives. If novelty and uncertainty are important for the psychology of sexual attraction, doing too much too early could make it difficult to generate more attraction later. On the other hand, moving too slowly risks boredom and sending mixed signals. Strategic considerations also include sizing up your target's other alternatives, which depend on the target's other suitors and their actions.
Economics and the psychology of courtship can strategically intersect in interesting ways. What about, for example, people who misperceive the intentions of others in games of courtship?
In a 2000 paper with University of Texas psychologist David Buss, my UCLA colleague Martie Haselton found that in courtship situations, men tend to overestimate women's interest in sex and women tend to underestimate men's interest in commitment.
For example, in surveys, a man's understanding of a woman's interest in having sex after, for example, being kissed by her, was more optimistic than what women reported as having intended by a kiss. Women's understanding of a man's interest in a committed relationship after, for example, receiving expensive jewelry from him, was more skeptical than what men reported as having intended by giving expensive jewelry.
Haselton interprets this result in terms of the relative costs of misunderstanding: men tend to be over-optimistic because they have more to lose from underestimating a woman's sexual interest (and thus losing a possible chance to mate) than from overestimating it. For their part, women are more skeptical because they lose more from overestimating a man's commitment than from underestimating it.
But systematic misunderstanding in this game can actually have social benefits. If men overestimate women's sexual interest and women underestimate men's commitment, men might attempt more often to initiate relationships and might work extra hard to overcome women's skepticism, thus creating more stable relationships than would occur if everyone's perceptions of each other were correct.
The logic here is very similar to Milton Friedman's 1968 explanation of how inflation can increase employment. The game here is the strategic interaction between employer and employee. Under Friedman's explanation, when there is serious inflation, employers can offer employees wages which are nominally higher ($11/hour instead of $10/hour, say), but which are in real terms lower because if inflation is greater than 10 percent a year, $11 next year is worth less than $10 today.
Thus employees sign up for work thinking they are going to be paid more, but employers are happy to have them because they will be paid less in real terms. In other words, if employers are aware of inflation, but employees are not, then employment increases. Similarly, if employers overestimate inflation, then they are fooled into believing that they're paying less than they actually are, in which case -- and this is the key -- they will hire more employees than they otherwise would have. Once again, a systematic misunderstanding will lead to a beneficial social outcome.
Of course, systematic misperception can also have negative effects: for example, in the game of international grand strategy, two countries might go to war "accidentally" because they misunderstand each other's true intentions.
But Friedman's argument suggests how systematic misperception, which is not quite the same as outright bumbling, can sometimes lead to socially positive outcomes. Just as systematic misperception between men and women about sex and commitment can have social benefits in the form of more committed relationships, systematic misperception between employees and employers about the real value of wages can have social benefits in the form of increased employment.
The constant is the logical analysis of strategic thinking that we call game theory. Austen's emphasis on strategic analysis can teach us about the world today, not just the manners and mores of rural England two centuries ago.
The social sciences are increasingly defined more by methodologies -- how you approach a question -- and less by subject matter and which questions you approach. My book "Jane Austen, Game Theorist" is meant to be an example of this trend since it argues that the novelist's vision of human behavior is methodologically quite similar to that of the mathematically-driven social scientist.
This duality -- or non-duality, as I see it -- between the "intuitive" and the "formal" came up in reader comments, and so did the topic of autism spectrum disorders. These two topics are related. One reader suggested that Austen's extremely analytical bent indicates that she had Asperger's. I don't know if Austen was on the autistic spectrum, but in a recent book, Phyllis Ferguson Bottomer does indeed analyze "Pride and Prejudice" from the perspective of autism.
In "Jane Austen, Game Theorist," I suggest that social science and game theory in particular can be understood as the analytic investigation of insights that many people find obvious. But this "formal," "nonintuitive" perspective can be valuable if for no other reason than it is different and forces people to see familiar things in a new way.
George Mason University economist and New York Times columnist Tyler Cowen suggests, for example, that when Adam Smith writes that human sympathy demands the perspective of an "impartial spectator," he's really talking about an autistic outsider who must observe others in detail precisely because he does not "get it" intuitively.
One reader wrote that Austen's novels help illustrate game-theoretic concepts but asked whether understanding her as a game theorist really generates new insights about literature. In other words, does my book and those like it simply attach newfangled terms from game theory to concepts which Austen readers already know well?
All I can say is that the study of literature has for a very long time interacted with ideas from social science, such as psychoanalysis and Marxism. Literary theorists including Lisa Zunshine at the University of Kentucky and Alan Richardson at Boston College have recently used cognitive psychology in their analyses. Game theory is a short step away.
Understanding Austen as a game theorist provides new interpretations of her work. As far as I can tell, no Austen scholar has analyzed the episode mentioned in my earlier article, in which Fanny Price chooses to wear both Mary Crawford's necklace and Edmund Bertram's chain. I am not aware of any previous interpretation of Austen's many examples of how one aspect of an alternative can be a "counterpoise of good" for another.
Of course, many understandings of Austen's novels are possible, and I do not claim that my own is somehow "better" than anyone else's. Understanding Austen as a game theorist, however, adds something new.
Michael Chwe's book "Jane Austen, Game Theorist" was published this year. Video courtesy of Michael Chwe's YouTube Channel.