How to play games- Psychology vs. Economics

“Knowledge of game theory does not make one a better card player, businessman or military strategist.”

-Anatol Rapoport

Let us assume that there are two players- Schlemiel and Schlimazel. Schlimazel invites Schlemiel for party in his house. Schlemiel does all sorts of things that will irritate Schlimazel like spills wine on hostess’s dress, break things, spoils curtains and rugs with food etc. Every time he commits blunder he apologizes to Schlimazel. Schlimazel is sure that Schlemiel is doing it on purpose.

'Hey! You look fabulous with your dress clinging to you like that!'

What should Schlimazel do?

Economics and Psychology offer different solutions.

Anatol Rapoport was a Russian-born American mathematical psychologist who came up with game of tit for tat. Game is similar to that of prisoner’s dilemma, where each player will follow a course of action which is consistent with his opponent’s previous turn. For example, if provoked, a player will subsequently respond with retaliation, but if not provoked, the player will subsequently cooperate.

Tit-for-tat strategies are based on the concepts of retaliation and altruism. When faced with a prisoner’s dilemma-like scenario, an individual will cooperate when the other member has an immediate history of cooperating and will default when the counterparty previously defaulted.


So Schlimazel’s next move should be similar to Schlemiel’s earlier move. If he misbehaves, then Schlimazel too behaves similarly at Schlemiel’s house. He can repeat this game till Schlemiel changes his behaviour.

“A schlemiel is one who always spills his soup, a schlimazel is the one on whom it always lands.”


Psychology offers a different solution on how to end this game. Eric Berne, a renowned psychologist has written book called “Games people play”.

He calls the game as “Schlemiel”. In this game Schlemiel is a cunning fellow while his victim Schlimazel is simple, good natured fellow. He forgives Schlemiel each time he commits blunder. Schlemiel takes advantage of Schlimazel’s self-control and enjoys game of damaging his property. Schlimazel on the other hand suppresses his anger to keep friendship intact.


Eric suggests an interesting solution to this game. Actually Schlemiel is more interesting in obtaining forgiveness for his misbehaviour than destroying property. Schlimazel can end game like this. When Schlemiel first apologizes, instead of forgiving by saying “It’s OK” he should say, “ Tonight you can embarrass my wife, ruin the furniture and wreck the rug, but please don’t say I’m sorry.'” Here he switches from being a forgiving Parent to being an objective Adult who takes the full responsibility for having invited Schlemiel in the first place.


Child in Schlemiel will keep saying, “You have to forgive things which appear accidental.”, and would want game to continue, but Parent in Schlimazel can end this game by saying, “You are right. But I have to show you what good manners are.”




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