I spent some time in Las Vegas over the holiday, and it occurred to me that casino blackjack is an interesting application of the rules vs. discretion debate in economics. This is part of the time consistency problem rewarded with a Nobel prize this year: discretionary policies are likely to be capricious and therefore more likely to be ignored than rules based policies.
But I digress. In blackjack as offered at casinos, dealers must follow strict rules about how to play their hands. Players are free to pursue strategies at their own discretion.
Why do casinos require dealers to follow rules? Some answers might be that dealers are not that bright, or can't be trusted. I think these are naive: dealers perform a repetitive task that practice makes close to perfect, and they do this under constant surveillance. In fact, most dealers are far more intimately connected to the game than the casual players that fill casinos - if they were given profit sharing and the discretion to play as they wished, I think they'd easily surpass the current rate of separation of gamblers from their money.
So, the reason for rules must be deeper. Here's my guess: dealers' rules implicitly invite the players to pursue their best discretion. People gamble for thrills; even if they could find an optimal rule to oppose the dealers' rules, the mechanistic application of that rule would remove some of the vicarious thrill of the turn of the next card. Rather, they prefer to optimize subject to their imperfect recollection of the cards that have already been played.
This story gets worse for players. Casinos can actually pursue riskier rules than players can - since the players go first, if they bust they lose whether the dealer busts of not. This puts players in the unenviable position of choosing between low risk (and boring) rules, or discretionary actions subject to imperfect information.