Game theory and why logic may not be very “Logical.”

Abstract

At the end of Stanley Kubrick's masterpiece Dr Strangelove: Or How I Learned to Stop Worrying and Love the Bomb, Major 'King' Kong rides the nuclear bomb to oblivion. The chosen few deep underground in the American War Room have ascertained that the Soviet's “Doomsday Machine” will automatically retaliate and enshroud the earth in a cloud of radioactive material for 100 years. The pristine logic of the Cold War that culminated in Kong riding the bomb in the film, and brought the world to the edge of oblivion with the Cuban Missile Crisis of 1962, is based on game theory. Strangelove is the first popular film or fiction to deal with game theory, and does so with great attention to detail. Thus, it is an excellent starting point for historical insight into the beginnings of what has recently been described in The New Palgrave: A Dictionary of Economics as a ...