IPE WEEK 2 Flashcards
What is game theory?
Game theory is a branch of applied mathematics used in social sciences to predict bargaining outcomes. It involves assumptions about actors, their available options, potential outcomes, and preferences.
What is the structure of the once-off Prisoners’ Dilemma game?
The Prisoners’ Dilemma involves two players, each with two options. There are four possible outcomes. The first prisoner’s preferences over outcomes, as well as the second prisoner’s, are crucial for understanding the game dynamics.
In the once-off Prisoners’ Dilemma game, is it a zero-sum or positive-sum game?
The once-off Prisoners’ Dilemma is typically considered a negative-sum game, where the collective outcomes are worse than potential cooperative outcomes.
How does individual strategic rationality lead to collective failure in the Prisoners’ Dilemma?
ach prisoner individually choosing to confess is strategically rational, leading to a Nash equilibrium. However, this results in a collective failure where both prisoners could have achieved better outcomes through cooperation.
What is the difference between dominant strategy and Nash equilibrium in the Prisoners’ Dilemma?
Dominant strategy: The best strategy for a player regardless of what the other player does.
Nash equilibrium: A stable situation where each player’s strategy is the best response to the others’, and no player wants to change their strategy.
What are the applications of the once-off Prisoner’s Dilemma?
Arms race between states: During the Cold War, the United States and the Soviet Union engaged in an arms race, each perceiving the other as a major political threat. This rivalry led to exorbitant spending on arms, showcasing the dilemma of whether to invest in defense or pursue disarmament.
OPEC oil cartel dynamics in markets: The Organization of the Petroleum Exporting Countries (OPEC) illustrates the Prisoner’s Dilemma in market competition. OPEC members aim to regulate oil supply to influence prices collectively. However, individual members face the temptation to produce more to maximize profits, leading to conflicts over production quotas and fluctuations in global oil prices.
West African cocoa holdups reflecting social conflict: In colonial West Africa, cocoa farmers faced exploitation by European merchants, leading to collective action in the form of holdups or strikes to demand fair prices. These holdups represent a social conflict scenario where farmers must coordinate actions to resist exploitation, highlighting the challenges of collective action and free-riding behavior.
What is the Battle of the Sexes, and how does it differ from the Prisoner’s Dilemma?
The Battle of the Sexes: It’s a coordination game illustrating the dilemma of coordinating actions when players have both common and opposed interests. For instance, a couple must decide between attending a soccer game (preferred by one) or going to the opera (preferred by the other). While they prefer to go together, they face a conflict over which event to choose.
Difference from the Prisoner’s Dilemma: Unlike the Prisoner’s Dilemma, where players have purely opposing interests, in the Battle of the Sexes, players share an interest in coordination but differ in their preferred outcomes. This difference leads to a conflict over which coordinated outcome to select, rather than a conflict over maximizing individual gains.
What are objections to applying the Prisoner’s Dilemma (PD) to real-life examples, as discussed in Goldstein’s work?
Additional actors: Real-life situations often involve multiple stakeholders beyond two players, such as arms manufacturers, global actors on non-proliferation, or non-state actors, complicating the analysis.
Additional options: In many cases, players have more than two choices, challenging the binary nature of the PD.
Structure of the game: PD models may oversimplify by assuming a one-shot game when interactions occur repeatedly over time, neglecting the influence of past actions on current decisions.
Informational problems: Real-world scenarios may involve trust issues and verification challenges, affecting decision-making. Information!
Role of ideology and religion: Factors like ideology and religion can significantly impact decision-making but are often overlooked in PD models.
What are contingent strategies, and what are the necessary conditions for their success?
Contingent strategies involve adapting one’s actions based on the actions of others in previous rounds of interaction. Success of contingent strategies relies on several conditions:
Easy detection of defection: Players must quickly identify when others deviate from cooperative behavior.
Reliable punishment for defection: There should be mechanisms in place to penalize defectors consistently to deter future deviations.
Long-term perspective: Players must have a sufficiently long time horizon to consider the consequences of their actions over multiple interactions.
Battle of the Sexes in real world?
Climate change example of BAttle of the Sexes (Inman)
