Summary of Hume’s Game-Theoretic Business Ethics by Peter Vanderschraaf

Game theory, being a systematic study of interdependent rational choice , has been widely used in inquiry on various aspects of business ethics including questions of morality, principles of justice, self-interest in interactions, etc. Vanderschraaf analyzes Hume’s contemplations on possible reconciliation of profit seeking and ethical norms through achieving the so-called Nash equilibrium. In other words, Vanderschraaf revisits the findings of Hume about the nature of cooperation in business community based on the game theory.

The main argument Hume draws in support of his ideas lies on the assumption that despite the fact that in any interaction humans are predetermined to face Farmer’s dilemma and not to go for mutually maximal beneficial choice due to the indigenous self-centredness and lack of trust, there exists the opportunity for them to go for the so-called conditional cooperation. Hume suggests that business community participants will use shadow-of-the future reasoning in self-interested commerce in order to mutually go for trigger strategy (cooperate until the partner defects and then always defect) , which can serve as an alternative to AD strategy (always defect) used in classical Farmer’s dilemma-type interactions.

Vanderschraaf does not generally contradict to Hume’s ideas, however, finds some deficiencies in Hume’s explanation of ‘how mutual expectations that support justice in economic exchanges arise in the community of self-centred agents’ . According to Vanderschraaf, there also exist other strategies the agents might undertake in striving for equilibrium apart from trigger and always-defect strategy. Moreover, the question of equilibrium selection (why agents choose this or that equilibrium strategy) remains open in game theory and, therefore, makes the topic Hume raised in his oeuvre more complicated than it may seem.

Verbeek, Bruno and Morris, Christopher, "Game Theory and Ethics", The Stanford Encyclopedia of Philosophy (Summer...