Chapter 4

1. Browning (1989), 389.

2. Wall Street Journal (July 2, 2002).

3. Game theorists use the phrase “dominated strategies,” but this phrase can be confusing since it looks and sounds like “dominant strategies.” Consequently I have decided to substitute the more scientific sounding “strictly stupid” for the term “dominated.”

4. Campaign for America (September 12, 2000).

5. Shouldn’t a rational taxpayer realize the benefits his government provides him and thus gladly pay his taxes? No! If you alone didn’t pay taxes then the total tax revenue the government receives would be only trivially smaller. Consequently, by not paying taxes you would save a lot of money but not notice any reduction in governmental services. Shouldn’t a potential taxpayer worry that if many people didn’t pay their taxes then the government would have to cut back on services? Again, no! Your not paying taxes is certainly not going to cause many other people to not pay their taxes. (Especially because if you become a tax cheat you will probably not advertise your activities.) Furthermore, if many other people are not planning on paying their taxes there is probably nothing that you can do about it. Consequently, it is best for you to ignore whether other people will pay their taxes and just concentrate on how you can minimize your tax burden.

6. Actually, most sensible people would be better off never playing the classic game of chicken. If a sensible person somehow found herself in such a game the optimal strategy would simply be to turn at the earliest possible moment. The classic chicken game assumes, however, that both players desperately want to be perceived as macho.

7. CNET News.com (December 4, 2001).

8. See Dixit and Skeath (1999), 110–112.

9. Dixit and Skeath (1999) provide an interesting and readable game theoretic analysis of the Cuban missile crises in Chapter 13 of their textbook.

10. See McMillan (1992), 73–74.