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Strategic Management Journal 1991

Burning your britches behind you: Can policy scholars bank on game theory?

Steven Postrel

University of California, Los Angeles

Abstract

Critics of game theory claim that it can be used to rationalize anything—even bank presidents setting their pants on fire in public. This article verifies the claim with a simple signalling model. The paper goes on to argue, however, that this criticsm is without force. Game theory is a toolbox for constructing useful models, rather than an empirically substantive theory; its power comes from imposing logical discipline upon the stories we tell.

DOI
10.1002/smj.4250121011
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