Bacharach: How the Variable Frame and Team Reasoning Theories Challenge Standard Noncooperative Game Theory

Chapter 4 adopts a history of economic thought approach to show that Bacharach, an economist trained in mathematics, contributed to integrating many of the dimensions of Schelling’s reorientation of game theory into his work in game theory. He integrated games with another intersubjective dimension, which, similar to Schelling’s focal points, relied on both subjective and collective dimensions. We show in particular that Bacharach’s theoretical contribution suggests a potential formal solution to a new game theory based on a new form of intersubjectivity that involves integration of players’ mental states but without the difficulties inherent in standard and epistemic game theory underlined in Chap. 2 . We underline Bacharach’s contribution in the form of the questions he posed and his highlighting of the limits to game theory that are rarely discussed. He formally extended standard game theory while simultaneously highlighting the porosity of some of its boundaries and the impermeability of others. We show that both of his theories, the variable frame theory and the team reasoning theory, are critical of the standard and closed-system mathematical boundaries to game theory. At the core of Bacharach’s work is an open-systems methodology.