[asift]

I love game theory, but I hate that the focus outside of academia is almost always on simplistic single period games. These games can result in some interesting conclusions and teach some valuable concepts, but they are terrible at representing how people behave in the real world.

Anyone interested in a more complex and realistic examination of the economics of pirating should consider Peter Leeson's book, The Invisible Hook: The Hidden Economics of Pirates.

I would also recommend Leeson's Anarchy Unbound: Why Self-Governance Works Better Than You Think for some interesting applications of game theory in more realistic historical contexts.

[pavel_lishin]

It's not meant to teach you about people or pirates; it's a simplified tool used to teach concepts and methods of thinking.

Much like a two-body system is useful for explaining gravity, even though there's virtually no place in the real world where that particular example would be useful.

[asift]

I get that, which is why I said it's useful for teaching, but I disagree with your notion that game theory is incapable of being anything other than an educational tool.

When models utilize more realistic assumptions, they can be incredibly powerful tools for understanding past behavior and predicting future behavior. Historical evaluation is particularly powerful when game theory is utilized with the analytical narrative form of analysis.

[smaddox]

Not sure I agree with your last statement. Our solar system can be modelled quite accurately and usefully as several overlapping 2-body systems. The interplanetary interactions are very small perturbations.