Five Lessons on Strategic Thinking from Jane Austen

austen-game-theoristOn Monday I mentioned Michael Suk-Young Chwe‘s new book, Jane Austen, Game Theorist. In this post we take a deeper look at Chwe’s argument: that Jane Austen was teaching lessons about strategic thinking through her novels in what he calls “folk game theory.” We will do that by going through chapters nine and ten in which Chwe examines five lessons on strategic thinking found in Austen’s six novels. I will focus here on examples from Pride and Prejudice as a way of narrowing the field and because it is probably the most popular of the six; page numbers refer to Chwe’s book.

1. Strategic thinking can lead to strong partnerships

One of Chwe’s goals in his book is to help dispel the notion that game theory is strictly atomistic. Austen does a good job of this because some of the strongest couples in her novels result from two characters jointly strategizing. Elizabeth Bennet and Mr. Darcy are first in conflict because they are strategizing differently (Mr. Darcy cannot imagine Elizabeth turning down his proposal of marriage; p. 146). Austen is shows the importance of choice and in particular the choice of a woman to accept to reject a proposal. As they encounter other strategic situations throughout the novel, though, Elizabeth and Mr. Darcy gradually establish a pattern of working together. By learning how the other thinks, they engage in what for Austen is the height of intimacy. This type of joint strategizing can also strengthen female friendships (for Austen females are the more strategic of the two genders; p. 151).

2. You can strategically manipulate yourself

Another matter of choice–again, a primary theme in Austen’s work–is the decision to engage in “self-management” (156). An individual can have multiple “selves,” some of which are more in line with her long-term goals than others. Temperament alone is not sufficient to maintain commitment to your long-term interests, so you must allow your more rational self to override your short-term interests. This strategy can also be used to work against your own biases if you are aware of them (157-8). Mr. Darcy argues in a letter to Elizabeth that he was aware of his bias and was able to avoid letting it influence him: “That I was desirous of believing her indifferent is certain,–but I will venture to say that my investigations and decisions are not usually influence by my hopes or fears.–I did not believe her indifferent because I wished it.”

3. Preferences can be changed

Most social science models take preferences as given, but Austen is interested in how they can be shaped. One mechanism for changing preferences is gratitude (158-9). When Elizabeth learns that Mr. Darcy helped support the marriage between her sister Lydia and Wickham she becomes much more open to the idea of a relationship with him  (telling him that “her sentiments had undergone so material a change… as to make her receive with gratitude and pleasure, his present assurances”). Love in Austen’s novels is a coordination problem, and being in love can also affect individuals’ preferences (160). A third factor that influences preferences is reference dependence: to what baseline are you comparing your current options (161-2).

4. Commitment requires strategic thinking

As discussed above, understanding how someone makes decisions–their preferences and strategies–is for Austen the basis of intimacy. By understanding another, you can view subsequent choices that might otherwise seem inconsistent as flowing from the same strategic point of view. This allows you to understand their goals and recognize their commitments (169). It also helps you to predict how they will react in changing circumstances, allowing you to assess whether and how committed they are to you.

5. Strategic thinking has its disadvantages

This final lesson is truly an innovation on Austen’s part, since contemporary game theory does not often consider downsides to rational thinking. Several complications may arise if you are known to be a strategic thinker. First, others might rely on you too heavily to make decisions for them (172). It may also lead to moral complications if others ask you to engage in strategic actions on their behalf, such as deception. Others might be less willing to help you if they know you are thinking strategically (173). If they view you as always looking for your own most preferred outcome, they may also become less trusting (175-6).

Through these lessons we can see that the manner in which an individual engages in strategic thinking can either strengthen or weaken her social interactions. Austen’s “folk game theory” helped to teach a disadvantaged social class how to outthink their counterparts and end up in more desirable circumstances. She also showed that game theory need not be individualistic, and how strategic thinking can be used to help others. If you enjoyed this post, there is much more to learn from Austen and Chwe does a great job of drawing out those lessons from all six of her novels. One of the biggest lessons in Austen’s novels–that others think differently from you–is still valuable today.

What Can Novels Teach Us?

Is it worthwhile for a social scientist to read fiction? What can novels teach us about human behavior? This post summarizes the work of several authors who would answer the first question with a resounding “yes,” and describes their arguments about how novels help us understand social behavior.

Most recently I had the pleasure of reading Michal Suk-Young Chwe‘s new book, Jane Austen, Game Theorist. Austen herself likely would have preferred the term “imaginist,” which is how the title character in Emma describes herself, referring to her strategic thinking abilities. Chwe’s argument in the book is that Austen is systematically analyzing strategic thinking through her novels. Austen certainly understood that novels could help teach social behavior: she writes in Northanger Abbey that novels contain “the most thorough knowledge of human nature [and] the happiest delineation of its varieties.” On Wednesday we will take a more detailed look at Chwe’s argument. In the meantime you can find a presentation summarizing the book here.

Austen would be in good company with Ariel Rubinstein. The central thesis of his recent book, Economic Fables, is straightforward: “Economic models are not more, but also not less, than stories–fables.” (You can read the book for free here, or see Ariel explain the motivation behind the book in this video.) Rubinstein’s view is actually the converse of Austen’s: he is not arguing that works of fiction are illustrative of human behavior, but that many social science models are themselves useful fictions. (Ed Leamer has advanced a similar view with a more practical twist in his book, Macroeconomic Patterns and Stories.)

Tyler Cowen helps to identify the key differences and similarities between models and novels in his paper, “Is a Novel a Model?” Here is the abstract:

I defend the relevance of fiction for social science investigation. Novels can be useful for making some economic approaches — such as behavioral economics or signaling theory — more plausible. Novels are more like models than is commonly believed. Some novels present verbal models of reality. I interpret other novels as a kind of simulation, akin to how simulations are used in economics. Economics can, and has, profited from the insights contained in novels. Nonetheless, while novels and models lie along a common spectrum, they differ in many particulars. I attempt a partial account of why we
sometimes look to models for understanding, and other times look to novels.

This interview with Tyler contains a summary of his perspective on novels and much more.

Cowen’s former GMU Economics colleague Russ Roberts also agrees that novels are useful for understanding social behavior–so much so that he has written three of them. Each of the novels illustrates one main economic lesson, and all of them support the idea of free markets for solving problems. Roberts interviewed Rubinstein the Econtalk podcast, in which they discuss some of the ideas that led to Rubinstein’s new book.

Overall this attention to useful fictions is a positive development for social science. Novels can help reach a much wider audience than journal articles and many nonfiction books. One danger–which we are far from now but still exists–is that we value the elegance of the novel itself (the language it uses) rather than the lessons it teaches. Another downside is that it is difficult to convey the policy relevance of a novel. Nevertheless, teaching lessons about human behavior in an enjoyable and memorable form is a huge step forward from most contemporary social science.