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Simulation & Gaming Simulation & Gaming http://sag.sagepub.com/ On the Trail of a White Whale: Sequel Martin Shubik Simulation Gaming published online 18 April 2013 DOI: 10.1177/1046878113480456 The online version of this article can be found at: http://sag.sagepub.com/content/early/2013/04/17/1046878113480456 Published by: http://www.sagepublications.com On behalf of: Association for Business Simulation & Experiential Learning International Simulation & Gaming Association Japan Association of Simulation & Gaming North American Simulation & Gaming Association Society for Intercultural Education, Training, & Research Additional services and information for Simulation & Gaming can be found at: Email Alerts: http://sag.sagepub.com/cgi/alerts Subscriptions: http://sag.sagepub.com/subscriptions Reprints: http://www.sagepub.com/journalsReprints.nav Permissions: http://www.sagepub.com/journalsPermissions.nav >> OnlineFirst Version of Record - Apr 18, 2013 What is This? Downloaded from sag.sagepub.com by DAVID CROOKALL on August 1, 2013 SAGXXX10.1177/1046878113480456Simulation & GamingShubik 480456research-article2013 Autobiographical Article Simulation & Gaming XX(X) 1 –20 On the Trail © 2013 SAGE Publications Reprints and permissions: of a White Whale: Sequel sagepub.com/journalsPermissions.nav DOI: 10.1177/1046878113480456 sag.sagepub.com Martin Shubik1 Abstract I offer a lengthy rationalization and an apologia pro vita sua for dreaming up, playing, experimenting with, and theorizing about games in various applications. Keywords experimental, financial institutions, game theory, gaming, operational, teaching, theory of money I must admit that I feel it is an indulgence to take time off to engage in this sort of puffery when one could be working or drinking a good Calvados, but a little self- indulgence can always be rationalized. I published an autobiography in 1997 titled On the Trail Of a White Whale: The Rationalizations of a Mathematical Institutional Economist (Shubik, 1997). Some 15 years later, this is an update. Frankly, I had not expected to last this long—but having done so and finding myself still on the trail, I continue with this scholar’s tale. In order to keep this essay self-contained and avoid asking the reader to return to the original source, here I give a brief summary of the 1997 text. Early Trail Although some scholars have deemed it desirable to stick to a single narrow discipline and concentrate on strength in-depth, I have always been fascinated by problems that could not easily be categorized as pertaining to a single discipline. Thus, I have always been far more interested in political economy than in economics. The under- standing of the role of money in a society calls clearly for an appreciation of law, poli- tics, bureaucracy, and economics embedded in custom and history as well as rules 1Yale University, New Haven, CT, USA Corresponding Author: Martin Shubik, Yale University, Cowles Foundation, 30 Hillhouse Avenue, New Haven, CT 06511, USA. Email: [email protected] Downloaded from sag.sagepub.com by DAVID CROOKALL on August 1, 2013 2 Simulation & Gaming XX(X) and regulation. A single, narrow, analytical approach will not yield the depth of understand- ing of a topic calling for a synthetic approach. I noted before very different styles in schol- arship. I belong to the small group of white whale hunters. This group consists of individu- als who have selected an enormously difficult long-term project and stick with it until they finish it, or it finishes them. My task for over 40 years has been to attempt to build a decent abstract theory of money and financial institu- tions and to use the methods of game theory and experimental gaming to bolster the plausibility of such a theory. Shubik, age 2 Ever since my days as an undergraduate and as a graduate student, I have become more and more aware that analysis and synthesis should be regarded as complements rather than alternatives. I coined the term Mathematical Institutional Economics to stress the feature that this phrase is no oxymo- ron, but describes a bringing together of two allied approaches, static economic analysis and a context sensitive synthesis required to describe and understand socio-politico- economic dynamics. Context-free economic dynamics do not exist—the institutions of the society are its carriers of process. I have been fascinated with game theory since 1948, when I first encountered the great book of von Neumann and Morgenstern (1944). As a graduate student at Princeton, I learned that the language of game theory had provided a key to formaliz- ing the description of all forms of formal games and that these provided a first step in being able to start to develop a language for less formal games and for social pro- cesses. At that time, I did not know about rigid rule gaming, and the idea of free form gaming beyond the military had not yet been fully developed. At Princeton, along with the formal development of game theory, graduate students showed considerable interest in the playing of formal games such as CHESS and GO, and in inventing games that could illustrate different social or strategic phenomena. For exam- ple, a group of us invented a game called SO LONG SUCKER (see Shubik, 1954) where we wanted to design a game where, in order to win, you needed to form coalitions; but this was not sufficient for winning, at some point you needed to double-cross your partner. Thus, by 1952, in my mind, game theory and gaming were already linked. One stressed formal rules and analysis, while the other was concerned with describing actual institu- tions and with providing a way to investigate behavior. From Lloyd Shapley, I knew that gaming experiments had already been carried out at RAND, and when I was at the Center for Advanced Study in the Behavioral Sciences in 1955, I had heard about Merrill Flood’s and Anatol Rapoport’s interest in experimental gaming. During this time, I took a trip with Martin Beckmann to Yosemite, and one evening around a campfire, when Martin and I were discussing utility theory, an indi- vidual on the other side of the fire had evidently overheard part of our conversation and came around to join us. This gentleman was Sidney Siegel, an experimental psychologist Downloaded from sag.sagepub.com by DAVID CROOKALL on August 1, 2013 Shubik 3 and one of the earliest proponents of using experimental gaming in economics and psychology. We had an immediate rapport and in the next few weeks agreed on long- term collaboration when I returned to the East Coast. Sid was at PennState University and I became an adjunct research professor there, flying in around once a month from New York. Sid had committed himself to finishing a book with Larry Fouraker, but Shubik, age 15 we intended to work on a series of other experiments in economics, once he had finished his commitment. Our plans were cut short by his premature sudden death. After my year at the Institute for Advanced Study in the Behavioral Sciences, I decided to join the operations research group at General Electric (G. E.), which was very permissive in allowing time to maintain academic connections, hence my trips to PennState to work with Sidney Siegel were approved. I also met George Feeney at G. E. and we shared joint interests in the potentials of business gaming and simulation. In retrospect, we were naively optimistic on both counts. It took many years for the profession to evaluate the uses and limitations of business games. These games were, for the most part, rigid rule games with a fairly impoverished environment supplied. At the time, with the great advantages bestowed by youth, ignorance, and enormous optimism, we grossly underestimated the pitfalls and the poverty of our models. The computer was going to cure everything. People, organization, intangibles, and facts were ignored as minor problems. This also held for our early forays into simulation. We already understood that straight mathematical analysis could only take us so far. The power of the computer offered up the possibili- ties of building far better models and overall feedback systems of the various indus- tries in which G. E. had plants. We greatly underestimated the state of the art of simulation in the mid-1950s and the costs of data gathering and analysis. In 1960, I was on leave from G. E. to visit Yale. While there, with the aid of Jim Friedman, we built an analytical business game, this is, one in which we could actu- ally calculate much of the structure and generate fairly clean testable hypotheses. I decided to not return to G. E., but to accept an offer to join a research group at the T. J. Watson research labs of IBM, where I had the pleasure of colleagues such as Ralph Gomory, Richard Karp and Sam Winograd, Benoit Mandelbrot, and several others. Benoit and I became and remained good friends for 50 years, until his death in 2010. I built both an experimental game and a business training game (FAME) while at IBM for their Sands Point facility; but I was beginning to see the considerable gap between abstract theory together with rigid rule games and actual practice filled with imponderables that did not appear in the games. During my tenure at IBM, I spent a fair amount of time thinking about how to embed money into a general equilibrium setting in a natural and nontrivial way. I made no progress whatsoever beyond butchering several dozen unsuccessful mod- els. Looking back after many years, I am reminded of a flip comment made by an eminent eye surgeon in reply to the question as to how one becomes an expert eye Downloaded from sag.sagepub.com by DAVID CROOKALL on August 1, 2013 4 Simulation & Gaming XX(X) surgeon.
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