section_path: Theories and philosophy/Game theory
section_name: Game theory
paragraph_text: Game theory
  
  Economist Yanis Varoufakis (2013) argues that "discrimination based on utterly arbitrary characteristics evolves quickly and systematically in the experimental laboratory", and that neither classical game theory nor neoclassical economics can explain this.
  
  In 2002, Varoufakis and Shaun Hargreaves-Heap ran an experiment where volunteers played a computer-mediated, multiround hawk-dove game. At the start of each session, each participant was assigned a color at random, either red or blue. At each round, each player learned the color assigned to his or her opponent, but nothing else about the opponent. Hargreaves-Heap and Varoufakis found that the players' behavior within a session frequently developed a discriminatory convention, giving a Nash equilibrium where players of one color (the "advantaged" color) consistently played the aggressive "hawk" strategy against players of the other, "disadvantaged" color, who played the acquiescent "dove" strategy against the advantaged color. Players of both colors used a mixed strategy when playing against players assigned the same color as their own. The experimenters then added a cooperation option to the game, and found that disadvantaged players usually cooperated with each other, while advantaged players usually did not. They state that while the equilibria reached in the original hawk-dove game are predicted by evolutionary game theory, game theory does not explain the emergence of cooperation in the disadvantaged group. Citing earlier psychological work of Matthew Rabin, they hypothesize that a norm of differing entitlements emerges across the two groups, and that this norm could define a "fairness" equilibrium within the disadvantaged group.