Here's something to do at your next dinner party after the guests have wined and dined, tell them you're auctioning off a dollar--a plain U.S. one-dollar bill. But set the rules as follows: while the winner gets the dollar, the second-highest bidder must also pay the amount of his last bid, even though he gets nothing. If you can get a single one-cent bid, chances are the auction will go to fifty cents. If someone bids fifty-one cents, bidding will almost certainly reach a dollar. If it goes to one dollar and one cent, the sky's the limit. No one wants to be the second-highest bidder. Afterwards the bidders say they spent so much because their opponent "went crazy," which is a little like saying "the fight started when he hit me back." Everyone has gotten into situations that resembled the dollar auction--where they devoted way too much effort to something not worth the commitment, because the cost of giving up was worse. Why do we act this way? How can we recognize these traps before we're in too deep? Is there such a thing as rational behavior, and if so, how do we use it to our advantage? Hungarian mathematician Laszlo Mero introduces us to the basics of John von Neumann's game theory and shows how it illuminates such aspects of human psychology as altruism, competition, and politics. Mero covers such concepts as zero-sum games; Prisoner's Dilemma; the game of Chicken (played with cars in Rebel Without A Cause), where logic proves that the rational strategy is to be irrational; how to be kind to your lover through game theory; and when the Golden Rule works and when it leads to disaster. Mero shows how game theory is applicable to fields ranging from physics to evolutionary biology, and explores the role of rational thinking in the context of real-life situations ranging from doorway etiquette to the nuclear arms race. He also explains how moral dilemmas arise; how to act rationally and ethically when they do; and how the intersection of rationality and irrationality inevitably becomes what we call "wisdom." This fascinating, urbane book shows us how we can better understand ethical behavior.

• Copernicus (An Imprint of Springer-Verlag)

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