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Seinfeld Economics: The Wig Master

by Linda Ghent

Game theory attempts to mathematically capture behavior in strategic situations, or games, in which an individual's success in making choices depends on the choices of others. Game theory has been used to study a wide variety of human and animal behaviors. It was initially developed in economics to understand a large collection of economic behaviors, including behaviors of firms, markets, and consumers. The use of game theory in the social sciences has expanded, and game theory has been applied to political, sociological, and psychological behaviors as well.

Reputation effects are analyzed in game theory and involve impacts on the belief that a player will carry out threats or deliver on promises.

 

Seinfeld: The Wig Master

Elaine goes out with a salesman who offers her a discount on a dress. He wants sex, but would prefer for her not to take advantage of the discount—he's dangling it in front of her as an incentive. She wants the discount, but would prefer not to have to sleep with him for it—she'd dangling it in front of him as an incentive. Both stall the other....and achieve a suboptimal social outcome. Kramer says “you need to establish trust before you can have a free exchange of sex...and discounts, the cornerstones of a healthy relationship.”

from Seinfeld, Season 7 (1996)
Creator: Larry David & Jerry Seinfeld
Posted by Linda Ghent
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