This is mechanism design, right?
King Solomon constructed a game with payoffs
which somehow are supposed to capture what's really going on with the mothers.
And based on the action was able to kind of determine what their
true preferences were so really this was a game about eliciting preferences.
And, in fact, that's exactly what you said.
You said, by their reactions, by their behavior, King Solomon was able to
figure out that A preferred that the baby live and have B get it, him.
Let's say him, while B preferred mainly that A not have the baby.
And by once getting preferences and saying well that all those preferences
only makes sense for the real mother and the fake mother.
Let's just go with that and so now I can determine the real mother is.
>> Okay >> Right and King Solomon's was.
Now I'm going to make a claim which is that this is insane and
doesn't actually make any sense.
So let me ask you this, Michael.
>> Sure.
>> You're a rational kind of guy.
>> I'm a wise guy.
>> Your definitely a wise guy.
Let's imagine that you were B,
let's say B is not the real baby mother, not the real baby mama.
>> Okay. >> So B is not the real mother, but
let's say that you're B.
>> Okay? >> I want to be the king but okay sure.
>> And King Solomon.
You can be both.
And King Solomon makes this offer.
I will cut the baby in half.
If your goal is to keep the baby or
at least to make certain A doesn't get the baby, what should you actually do?
>> All right here's what I think you want me to say but
I'm not sure that I completely get it.
So B Is as wise as King Solomon, because game theory
assumes we have rational agents, etc, etc with infinite processing power.
So B is at least as smart as King Solomon, and so
B says, okay, King Solomon is going to use whatever I say to decide whether or
not I'm the real mom.
And in particular, if I say don't cut the baby, he'll think I'm the real mom.
So B will cry out do not cut the baby.
>> No.
>> And now King Solomon's back where he started and
that he has two identical women and two identical reactions.
>> Right.
And so if both of them say no, then King Solomon knows nothing.
But A being a extremely rational person as well says, King Solomon will
know that the person who actually is not the mom is going to say no facetiously
and so only the real mom would say, yes cut the baby in half.
>> No.
>> No? >> No because if that were true
then the other thing would, then the story would make any sense.
Actually the story doesn't make any sense because first off the idea that
someone would say you're going to cut the baby in half I'm fine with that.
>> [LAUGH] >> As if people feel like that's
a caring mom none of that makes any sense but don't have to go we can just
talk about game theory and there's a little matrix here and
code The best action for both of them is just to both say no.
>> So you're saying King Solomon set up a kind of a mechanism design problem or
set up a mechanism.
And it was a flawed mechanism because
if you understand the mechanism you know the right thing to say is just no and so
no and then he has to flip a coin to decide who gets the baby?
>> Right. And
then you're doing pretty okay in that game,
certainly better than the alternative, which is to say yes.
Think about it. If your action in
some sense is either say no, or to say yes, it was my baby, or
it's the other person's baby, the equilibrium here is sort of both,
if the other person says no, there's no reason for you to say yes.
>> Right. >> And if the other person says yes.
Then you should say no.
>> Right, so that's a dominant strategy.
>> It's a lot like chicken and dare.
>> Chicken and dare has this sort of thing where
you want to be the daring one if the other one's the chicken.
This is like, everyone says no.
Yeah, okay. Fair enough, but
you basically both want to say no.
There's no circumstances under which you want to say cut the baby in half.
>> All right, all right.
>> That's awesome.
>> Yeah. >> I mean so
the problem with this of course is that none of these people study game theory.
So they maybe hadn't thought things through and
they were just giving their original reaction.
>> Well I'm pretty sure in the real world even people who haven't
studied game theory would know better than the say sure cut the baby in half.
That's just not socially acceptable.