Economy and Disability: A Game Theoretic Approach (Economy and Social Inclusion)

Society has developed so that it accommodates the needs of intertwined people, but a question arises as to which people have been accommodated. Has everyone been taken care of in an equal manner? If not, who has fallen into the gap between the institutions that are supposed to accommodate them? This book is a study of these issues of economy and disability using game theory, which has provided a means of analyzing various social phenomena. Part I provides actual cases related to economy and disability, with the stories based on interviews by the author. Part II is geared toward a game theoretic analysis. This book explains disability-related issues by game theory and innovates that theory by deeply contemplating the issues. It is not common that first-rate theorists manage to make their research relevant and applicable to the most pressing problems our society faces these days. This is the remarkable achievement of this book. Akihiko Matsui, an internationally recognized leader in economic theory, succeeds in bringing profound game theoretical insights to the questions of disability, the social norms relating to it, and the ethical and economic problems they raise. The book is a tour de force, brilliantly combining economic and sociology, mathematics and philosophy, to provide us a fresh look at the way we run modern societies. Itzahk Gilboa, Professor, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris The present world faces a broad range of societal problems such as discrimination against minorities and conflicts between groups. The market mechanism may solve some of these dilemmas, but many others remain. This book targets various societal problems and provides game theoretical approaches to them, stressing the importance of social institutions including the market system and individual interactive attitudes to society. Aki Matsui’s splendid __Economy and Disability__ is indispensable for students and scholars interested in social science, particularly in economic theory, and gives a better understanding of these phenomena and their potential cures. Mamoru Kaneko, Professor, Faculty of Political Science and Economics, Waseda University In this book, Aki Matsui is revealed to be a fully-fledged humanist in the guise of a game theoretician. He beautifully presents game-theoretical ideas while at the same time suggesting how society should relate to the disabled. This unique combination makes __Economy and Disability__—apart from anything else—a truly moving book. Ariel Rubinstein, Professor of Economics, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics, New York University Preface 6 Contents 8 About the Author 12 1 Introduction 13 1.1 The Escalator in Japan 13 1.2 Some Basic Facts About Disability in Japan 16 1.3 A Game-Theoretic Analysis 20 1.4 Organization of the Book 24 Part I Disability and the Market: Cases 27 2 The Market for All? 28 2.1 Independence of Persons with Disability 28 2.2 Supporting Others While Being Supported 31 3 Economies for the Majority 33 3.1 Children with Hearing Disability 33 3.2 The Dancer Fighting with a ``Forgotten Cancer'' 35 3.3 Chronic Myelogenous Leukaemia 37 4 Dominant Views and Prejudices 42 4.1 ``There Is No Such Color!'' 42 4.2 Disqualifying Clauses on Disability 44 5 Creating the Market for All 47 5.1 The City of Eyeglasses 47 5.2 Atelier Incurve 49 5.3 Children Attending Juku 54 Part II Game Theory and Disability 57 6 Game Theory 58 6.1 Introduction 58 6.2 Social Norms and Rational Behavior 59 6.3 Games in Strategic Form 60 6.3.1 Games in Strategic Form and Zero-Sum Games 60 6.3.2 Nash Equilibrium 62 6.4 Evolutionarily Stable Strategies 63 6.5 Deterministic Dynamics 65 7 The More, the Better 68 7.1 Scale Economy, Coordination Games, and Strategic Complementarity 68 7.2 Network Externality 71 7.3 Institutional Complementarity 72 Part III Toward a Theory of Economy and Disability 74 8 Best Response Dynamics 75 8.1 Introduction 75 8.2 Social Stability 77 8.2.1 Definitions and Notations 78 8.2.2 Socially Stable Sets 79 8.2.3 Properties of Socially Stable Sets 82 8.3 Static and Dynamic Concepts of Social Stability 85 8.3.1 Static versus Dynamic Concepts 85 8.3.2 Definitions and Notations 87 8.3.3 Evolutionarily Stable Strategies and Replicator Dynamics 88 8.3.4 A Point-Valued Solution Concept and Its Static Equivalence 89 8.3.5 Set-Valued Solution Concepts and Their Existence 92 8.3.6 Various Games 94 8.4 Deterministic versus Stochastic Dynamics 97 9 Cheap-Talk and Cooperation in a Society 100 9.1 Introduction 100 9.2 Games of Common Interest with Cheap-Talk 103 9.3 Social Stability and Socially Stable Sets 105 9.4 Optimality Result and Its Proof 106 9.5 Other Games 109 9.6 Voice Matters in a Dictator Game 111 10 Evolution and the Interaction of Conventions 112 10.1 Introduction 112 10.2 The Model 114 10.2.1 No-coordination Equilibria 115 10.2.2 Partial Coordination 117 10.3 The Evolution of Conventions Through Integration 118 10.4 Welfare 120 10.5 Extensions 120 10.5.1 Endogenous Matching Probability 120 10.5.2 Government Intervention 122 10.5.3 Discrimination 123 10.5.4 A K-Society Model 124 10.6 Remarks 125 11 When Trade Requires Coordination 127 11.1 Introduction 127 11.2 The Model 130 11.3 Equilibria 132 11.3.1 Autarky 132 11.3.2 Unification 134 11.4 Dynamics 136 11.4.1 Small Community Versus Large Community 136 11.4.2 Incomparable Community Sizes 139 11.4.3 Different Initial Conditions 139 11.5 Welfare Implications 140 11.6 Welfare Under Increasing-Returns-to-Scale Matching Technology 142 11.7 Remarks 146 12 A Model of Man as a Creator of the World 148 12.1 Introduction 148 12.2 Inductive Construction of Models 151 12.2.1 Impressions and Experiences 151 12.2.2 Models 151 12.2.3 Axioms 151 12.2.4 Prior Beliefs 153 12.3 Applications 153 12.3.1 Predation 153 12.3.2 Bullying 155 12.3.3 Pioneers 156 12.4 Induction and the Science of Man 157 12.4.1 Hume 157 12.4.2 Einstein 159 12.5 Remarks 160 13 Segregation and Discrimination in Festival Games 162 13.1 Introduction 162 13.2 Festival Games 166 13.3 Experiences and Inductive Stability 168 13.4 Segregation and Discrimination 172 13.4.1 An Example 174 13.5 Escaping from Segregation 177 14 Prejudices Induced by Segregation 181 14.1 Introduction 181 14.2 Inductive Construction of an Image of the Society 181 14.2.1 Individual Models Built by a Player 182 14.2.2 Coherence of Models with Experiences 184 14.3 Rationalization 186 14.4 Prejudicial Models 186 14.5 Escaping from Prejudicial Models 190 14.6 Discussion 191 14.6.1 Sequential Rationality and Rationalization 192 14.6.2 Interactions Between Models and Behavior 193 14.6.3 Comparisons with Merton's Classification 195 14.6.4 Large Societal Games Versus Small Micro Games 196 15 Everyone on the Island Spoke Sign Language 200 15.1 Introduction 200 15.2 Hereditary Deafness on Martha's Vineyard Island 203 15.3 Model 204 15.3.1 The Majority Bargaining Games 204 15.3.2 The Unanimity Bargaining Games 205 15.4 Analysis of the Second Stage: A Deductive Approach 207 15.4.1 The Majority Bargaining Games 207 15.4.2 The Unanimity Bargaining Games 211 15.5 The Analysis of the First Stage: An Evolutionary Approach 212 15.5.1 The Majority Bargaining Game 213 15.5.2 The Unanimity Bargaining Game 214 15.6 Prejudice: An Inductive Approach 215 15.7 Remarks 218 16 Concluding Remarks 219 References 222 Author Index 227 Subject Index 230 Society has developed so that it accommodates the needs of intertwined people, but a question arises as to which people have been accommodated. Has everyone been taken care of in an equal manner? If not, who has fallen into the gap between the institutions that are supposed to accommodate them? This book is a study of these issues of economy and disability using game theory, which has provided a means of analyzing various social phenomena. Part I provides actual cases related to economy and disability, with the stories based on interviews by the author. Part II is geared toward a game theoretic analysis. This book explains disability-related issues by game theory and innovates that theory by deeply contemplating the issues. It is not common that first-rate theorists manage to make their research relevant and applicable to the most pressing problems our society faces these days. This is the remarkable achievement of this book. Akihiko Matsui, an internationally recognized leader in economic theory, succeeds in bringing profound game theoretical insights to the questions of disability, the social norms relating to it, and the ethical and economic problems they raise. The book is a tour de force, brilliantly combining economic and sociology, mathematics and philosophy, to provide us a fresh look at the way we run modern societies. Itzahk Gilboa, Professor, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris The present world faces a broad range of societal problems such as discrimination against minorities and conflicts between groups. The market mechanism may solve some of these dilemmas, but many others remain. This book targets various societal problems and provides game theoretical approaches to them, stressing the importance of social institutions including the market system and individual interactive attitudes to society. Aki Matsui’s splendid Economy and Disability is indispensable for students and scholars interested in social science, particularly in economic theory, and gives a better understanding of these phenomena and their potential cures. Mamoru Kaneko, Professor, Faculty of Political Science and Economics, Waseda University In this book, Aki Matsui is revealed to be a fully-fledged humanist in the guise of a game theoretician. He beautifully presents game-theoretical ideas while at the same time suggesting how society should relate to the disabled. This unique combination makes Economy and Disability —apart from anything else—a truly moving book. Ariel Rubinstein, Professor of Economics, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics, New York University Society has developed so that it accommodates the needs of intertwined people, but a question arises as to which people have been accommodated. Has everyone been taken care of in an equal manner? If not, who has fallen into the gap between the institutions that are supposed to accommodate them? This book is a study of these issues of economy and disability using game theory, which has provided a means of analyzing various social phenomena. Part I provides actual cases related to economy and disability, with the stories based on interviews by the author. Part II is geared toward a game theoretic analysis. This book explains disability-related issues by game theory and innovates that theory by deeply contemplating the issues. It is not common that first-rate theorists manage to make their research relevant and applicable to the most pressing problems our society faces these days. This is the remarkable achievement of this book. Akihiko Matsui, an internationally recognized leader in economic theory, succeeds in bringing profound game theoretical insights to the questions of disability, the social norms relating to it, and the ethical and economic problems they raise. The book is a tour de force, brilliantly combining economic and sociology, mathematics and philosophy, to provide us a fresh look at the way we run modern societies. Itzahk Gilboa, Professor, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics and Decision Sciences, HEC, Paris The present world faces a broad range of societal problems such as discrimination against minorities and conflicts between groups. The market mechanism may solve some of these dilemmas, but many others remain. This book targets various societal problems and provides game theoretical approaches to them, stressing the importance of social institutions including the market system and individual interactive attitudes to society. Aki Matsuis splendid Economy and Disability is indispensable for students an d scholars interested in social science, particularly in economic theory, and gives a better understanding of these phenomena and their potential cures. Mamoru Kaneko, Professor, Faculty of Political Science and Economics, Waseda University In this book, Aki Matsui is revealed to be a fully-fledged humanist in the guise of a game theoretician. He beautifully presents game-theoretical ideas while at the same time suggesting how society should relate to the disabled. This unique combination makes Economy and Disability--apart from anything else--a truly moving book. Ariel Rubinstein, Professor of Economics, Eitan Berglas School of Economics, Tel-Aviv University and Professor of Economics, New York University Front Matter ....Pages i-xi Introduction (Akihiko Matsui)....Pages 1-14 Front Matter ....Pages 15-15 The Market for All? (Akihiko Matsui)....Pages 17-21 Economies for the Majority (Akihiko Matsui)....Pages 23-31 Dominant Views and Prejudices (Akihiko Matsui)....Pages 33-37 Creating the Market for All (Akihiko Matsui)....Pages 39-48 Front Matter ....Pages 49-49 Game Theory (Akihiko Matsui)....Pages 51-60 The More, the Better (Akihiko Matsui)....Pages 61-66 Front Matter ....Pages 67-67 Best Response Dynamics (Akihiko Matsui)....Pages 69-93 Cheap-Talk and Cooperation in a Society (Akihiko Matsui)....Pages 95-106 Evolution and the Interaction of Conventions (Akihiko Matsui)....Pages 107-121 When Trade Requires Coordination (Akihiko Matsui)....Pages 123-143 A Model of Man as a Creator of the World (Akihiko Matsui)....Pages 145-158 Segregation and Discrimination in Festival Games (Akihiko Matsui)....Pages 159-177 Prejudices Induced by Segregation (Akihiko Matsui)....Pages 179-197 Everyone on the Island Spoke Sign Language (Akihiko Matsui)....Pages 199-217 Concluding Remarks (Akihiko Matsui)....Pages 219-221 Back Matter ....Pages 223-236