The Snapping Point

Dear Sylvia,

Let’s think about the problem logically. Game theory is the tool of choice for any such interaction. First, Alasdair decides whether to be naughty. Then you decide whether or not to punish him. He prefers to be naughty only if unpunished, and you prefer only to threaten punishments that are not carried out.

There are two equilibria to the game: the one you complain about, when he is naughty and you do not punish him; and the one you want, when you punish him if he is naughty but don’t have to carry out the punishment because he is good.

If the second equilibrium sounds implausible, that’s because it is. Economists call this a “non-subgame-perfect equilibrium”: in other words, when Alasdair calls your bluff, you back down.

No wonder you find yourself in the unwanted, subgame perfect equilibrium. Economists have long known that in a one-off situation, you will never make your threat credible. But never fear, you will play this game again and again, both with Alasdair and your younger children. That changes the dynamic completely.

It is crucial to establish a reputation for toughness. Remember that when you punish Alasdair, you have lost the battle but are winning the war: the discomfort of imposing discipline should be weighed against the future misbehaviour you are preventing. As your reputation as a disciplinarian becomes established, your children’s behaviour will improve.

Perhaps this all seems like common sense, but you should be aware that two Nobel prizes have been awarded for this analysis. Economists have worked hard to demonstrate to you that sometimes you have to be cruel to be kind.

Credit:
Tim Harford , "Dear Undercover Economist" by Little, Brown (2009)
GIF by kimi-no-kao@tumblr



I knew that when I came up for the title to my previous Kazoku Game post, I had read it somewhere else before. Why is it that some of my favorite non-fiction writers always turn out to be British?