Superrationality

In economics and game theory, a participant is considered to have superrationality (or renormalized rationality) if they have perfect rationality (and thus maximize their own utility) but assume that all other players are superrational too and that a superrational individual will always come up with the same strategy as any other superrational thinker when facing the same problem. Applying this definition, a superrational player playing against a superrational opponent in a prisoner's dilemma will cooperate while a rationally self-interested player would defect.

This decision rule is not a mainstream model within game theory and was suggested by Douglas Hofstadter in his article, series, and book Metamagical Themas^[1] as an alternative type of rational decision making different from the widely accepted game-theoretic one. Superrationality is a form of Immanuel Kant's categorical imperative.^[2][3]

He defined it in a recursive way:

Superrational thinkers, by recursive definition, include in their calculations the fact that they are in a group of superrational thinkers.^[1]

Note that contrary to the Homo reciprocans, the superrational thinker will not always play the equilibrium that maximizes the total social utility, and is thus not a philanthropist.

Prisoner's dilemma

The idea of superrationality is that two logical thinkers analyzing the same problem will think of the same correct answer. For example, if two people are both good at math and both have been given the same complicated problem to do, both will get the same right answer. In math, knowing that the two answers are going to be the same doesn't change the value of the problem, but in game theory, knowing that the answer will be the same might change the answer itself.

The prisoner's dilemma is usually framed in terms of jail sentences for criminals, but it can be stated equally well with cash prizes instead. Two players are each given the choice to cooperate (C) or to defect (D). The players choose without knowing what the other is going to do. If both cooperate, each will get $100. If they both defect, they each get $1. If one cooperates and the other defects, then the defecting player gets $200, while the cooperating player gets nothing.

The four outcomes and the payoff to each player are listed below

One valid way for the players to reason is as follows:

1. Assuming the other player defects, if I cooperate I get nothing and if I defect I get a dollar.
2. Assuming the other player cooperates, I get $100 if I cooperate and $200 if I defect.
3. So whatever the other player does, my payoff is increased by defecting, if only by one dollar.

The conclusion is that the rational thing to do is to defect. This type of reasoning defines game-theoretic rationality, and two game-theoretic rational players playing this game both defect and receive a dollar each.

Superrationality is an alternative method of reasoning. First, it is assumed that the answer to a symmetric problem will be the same for all the superrational players. Thus the sameness is taken into account before knowing what the strategy will be. The strategy is found by maximizing the payoff to each player, assuming that they all use the same strategy. Since the superrational player knows that the other superrational player will do the same thing, whatever that might be, there are only two choices for two superrational players. Both will cooperate or both will defect depending on the value of the superrational answer. Thus the two superrational players will both cooperate, since this answer maximizes their payoff. Two superrational players playing this game will each walk away with $100.

Note that a superrational player playing against a game-theoretic rational player will defect, since the strategy only assumes that the superrational players will agree. A superrational player playing against a player of uncertain superrationality will sometimes defect and sometimes cooperate.

Although standard game theory assumes common knowledge of rationality, it does so in a different way. The game theoretic analysis maximizes payoffs by allowing each player to change strategies independently of the others, even though in the end, it assumes that the answer in a symmetric game will be the same for all. This is the definition of a game theoretic Nash equilibrium, which defines a stable strategy as one where no player can improve the payoffs by unilaterally changing course. The superrational equilibrium is one which maximizes payoffs where all the players' strategies are forced to be the same before the maximization step.

Some argue that superrationality implies a kind of magical thinking in which each player supposes that their decision to cooperate will cause the other player to cooperate, despite the fact that there is no communication. Hofstadter points out that the concept of "choice" doesn't apply when the player's goal is to figure something out, and that the decision does not cause the other player to cooperate, but rather same logic leads to same answer independent of communication or cause and effect. This debate is over whether it is reasonable for human beings to act in a superrational manner, not over what superrationality means.

There is no agreed upon extension of the concept of superrationality to asymmetric games.

Probabilistic strategies

For simplicity, the foregoing account of superrationality ignored mixed strategies: the possibility that the best choice could be to flip a coin, or more generally to choose different outcomes with some probability. In the prisoner's dilemma, it is superrational to cooperate with probability 1 even when mixed strategies are admitted, because the average payoff when one player cooperates and the other defects is less than when both cooperate. But in certain extreme cases, the superrational strategy is mixed.

For example, if the payoffs in are as follows:

CC – $100/$100

CD – $0/$1,000,000

DC – $1,000,000/$0

DD – $1/$1

So that defecting is a huge reward, the superrational strategy maximizes the expected payoff to you assuming that the other player reasons the same way. This is achieved by defecting with a probability that approaches 1/2 as the reward increases to infinity.

In similar situations with more players, using a randomising device can be essential. One example discussed by Hofstadter is the platonia dilemma: an eccentric trillionaire contacts 20 people, and tells them that if one and only one of them sends them a telegram (assumed to cost nothing) by noon the next day, that person will receive a billion dollars. If they receive more than one telegram, or none at all, no one will get any money, and communication between players is forbidden. In this situation, the superrational thing to do (if it is known that all 20 are superrational) is to send a telegram with probability p=1/20 — that is, each recipient essentially rolls a 20-sided die and only sends a telegram if it comes up "1". This maximizes the probability that exactly one telegram is received.

Notice though that this is not the solution in a conventional game-theoretical analysis. Twenty game-theoretically rational players would each send in a telegram and therefore receive nothing. This is because sending the telegram is the dominant strategy; if an individual player sends a telegram they have a chance of receiving money, but if they send no telegram they cannot get anything.

See also

• Perfect rationality

References