Hume’s Game-Theoretic Business Ethics

In recent years, a number of authors have used game-theoretic reasoning to explain why purely self-interested agents would ever conform their economic activities with the requirements of justice, when by doing so they forego opportunities to reap unilateral net gains by exploiting others. In this paper, I argue that Hume’s justification of honest economic exchanges between self-interested agents in the Treatise foreshadows this contemporary literature. Hume analyzes the problem of explaining justice in self-interested economic exchange as a problem of agents coordinating on a pattern of reciprocal cooperation, as opposed to some other behavioral pattern such as reciprocal exploitation, in exchanges repeated over time. Hume’s arguments anticipate informally the contemporary interpretation of just economic practices as forming part of an equilibrium of a repeated game. I close the paper by arguing that Hume does not provide a satisfactory explanation of how the mutual expectations that support justice in economic exchange arise in a community of self-interested agents. The problem Hume leaves unsolved is one of equilibrium selection, that is: Why do agents follow an equilibrium corresponding to just economic exchanges rather than some other equilibrium corresponding to unjust exchanges? I also argue that contemporary game theory still lacks a satisfactory theory of equilibrium selection, but that such a theory would lead us closer to a satisfactory Humean reconciliation of justice and self-interest in economic exchange.