Publication Date
11-2008
Abstract
Political and social activists are rightfully concerned about future generations: whenever a country borrows money, or an environmental situation worsens, this means, in effect, that we impose an additional burdens on future generations. There is clearly a conflict between the present generation's actions and interests and the welfare of the future generations. There exists a mathematical toolbox that provides solutions to many well-defined conflict situations: namely, the toolbox of game theory. It therefore seems reasonable to apply game theory techniques to the conflict between the generations. In this paper, we show that we need to be very cautious about this application, because reasonable game theoretic techniques such as Nash bargaining solution can lead to disastrous "solutions" such as universal poverty. In other words, seemingly reasonable altruism can lead to solutions which are as disastrous as extreme selfishness.
The development of appropriate techniques -- techniques which would lead to a reasonable resolution of this inter-generational conflict -- thus remains an important open problem.
Comments
Technical Report: UTEP-CS-08-41
Published in Applied Mathematical Sciences, 2009, Vol. 3, No. 22, pp. 1091-1096.