Modeling Cycles of Grift with Evolutionary Game Theory
This piece applies evolutionary game theory to model the cyclical nature of "grift," proposing a "Grifter, Skeptic, Mark" (GSM) model that orbits through dominance. It suggests that grift isn't a new normal but a recurrent phenomenon, driven by the population's shifting vigilance, much like a rock-paper-scissors dynamic. HN loves interdisciplinary approaches to social phenomena, especially when backed by a mathematical framework like EGT, offering a fresh perspective on a familiar problem.
The Lowdown
The article delves into the persistent and cyclical nature of "grift," from historical swindles to modern digital scams. It posits that these cycles can be understood through the lens of Evolutionary Game Theory (EGT), introducing a novel model to explain the rise and fall of exploitative behaviors.
- Historical Context: The author highlights the enduring presence of fraud across eras, referencing examples from Mark Twain's time to the Great Depression and even medieval periods, drawing parallels to today's crypto rug pulls and MLM schemes.
- Evolutionary Game Theory (EGT): The piece distinguishes EGT from rational-agent game theory, explaining how EGT models strategy prevalence based on their success within a population, where more successful strategies become more common over time.
- The GSM Model: A central component is the proposed "Grifter, Skeptic, Mark" (GSM) model. "Grifters" attempt exploitation; "Skeptics" pay a cost for vigilance to avoid exploitation; and "Marks" are trusting but vulnerable. This model defines a payoff matrix for interactions between these three strategies.
- Cyclical Dynamics: Unlike some EGT models that converge to a stable equilibrium, the GSM model, when simulated, exhibits non-transitive, quasi-periodic cycles. This means the system does not settle, but instead, each strategy takes turns dominating before inevitably giving way to another, similar to a rock-paper-scissors dynamic.
- Why Cycles?: The cycles are driven by the interactions: Marks thrive when grifters are rare, Grifters thrive when marks are common, and Skeptics thrive when grifters are common. This inherent dynamic means success in one phase inevitably leads to conditions favoring another strategy.
- Implications and Predictions: The model suggests that the current "golden age of grift" will naturally lead to a period of increased skepticism, causing grifters to become less successful. While acknowledging the model's simplicity, the author argues it provides a useful framework for understanding these natural fluctuations without requiring external drivers. Ultimately, the article presents a mathematically elegant, albeit simplified, explanation for the ebb and flow of grift in society. It concludes that such cycles are an intrinsic part of human dynamics, implying that vigilance is a recurring lesson society must learn and re-learn.