Economics And Language: Five Essays

This page intentionally left blank Arising out of the author’s lifetime fascination with the links between the formal language of mathematical models and natural language, this short book comprises five essays investigating both the economics of language and the language of economics. Ariel Rubinstein touches on the structure imposed on binary relations in daily language, the evolutionary development of the meaning of words, game-theoretical considerations of pragmatics, the language of economic agents, and the rhetoric of game theory. These short essays are full of challenging ideas for social scientists that should help to encourage a fundamental rethinking of many of the underlying assumptions in economic theory and game theory. A postscript contains comments by a logician, Johan van Benthem (University of Amsterdam, Institute for Logic, Language and Computation and Stanford University, Center for the Study of Language and Information) and two economists, Tilman Börgers (University College, London) and Barton Lipman (University of Wisconsin, Madison). A R I E L R U B I N S T E I N is Professor of Economics at Tel Aviv University and Princeton University. His recent publications include Modeling Bounded Rationality (1998), A Course in Game Theory (with M. Osborne, 1994) and Bargaining and Markets (with M. Osborne, 1990). Economics and Language Five Essays T H E C H U R C H I L L L E C T U R E S I N E C O N O M I C T H E O RY Economics and Language Five Essays ARIEL RUBINSTEIN Tel Aviv University Princeton University           The Pitt Building, Trumpington Street, Cambridge, United Kingdom    The Edinburgh Building, Cambridge CB2 2RU, UK 40 West 20th Street, New York, NY 10011-4211, USA 477 Williamstown Road, Port Melbourne, VIC 3207, Australia Ruiz de Alarcón 13, 28014 Madrid, Spain Dock House, The Waterfront, Cape Town 8001, South Africa http://www.cambridge.org © Ariel Rubinstein 2004 First published in printed format 2000 ISBN 0-511-03913-1 eBook (Adobe Reader) ISBN 0-521-59306-9 hardback ISBN 0-521-78990-7 paperback CONTENTS 0 Acknowledgments page viii PA RT 1 E C O N O M I C S O F L A N G U A G E 0 Economics and language 3 1 Choosing the semantic properties of language 9 2 Evolution gives meaning to language 25 3 Strategic considerations in pragmatics 37 PA RT 2 L A N G U A G E O F E C O N O M I C S 4 Decision making and language 55 5 On the rhetoric of game theory 71 Concluding remarks 89 PA RT 3 C O M M E N T S 0 Johan van Benthem 93 0 Tilman Börgers 108 0 Barton Lipman 114 0 Index 125 vii ACKNOWLEDGMENTS This book emerged from the kind invitation of the fellows of Churchill College to deliver the Churchill Lectures of 1996. It is a pleasure for me to use this opportunity to thank Frank Hahn, for his encourageme