Lecture 1

Question 1

Game theory

Answer 1

Modelizing the behaviour of rational human beings in a strategic situation.

1. I am rational (I want to maximise my profit)
2. I expect other people to be rational

Additionally, there needs to be competition.

Question 2

The Public Goods Experiment

Answer 2

1. Groups are given an initial stake (10 euros each)
2. Individuals decide how much to contribute to a public goods project
3. Contributions are doubled and distributed equally
4. Dilemma: maximise personal return or cooperate for collective benefit?

Question 3

The effect of one-shot games vs. repeated games (7 rounds) (Cochard et al., 2004)

Answer 3

A can send between 0 and 10 euros to B. This amount is x3 by the experiment. Then B can return any amount of money from the sum they got. This game was repeated, and results showed that the amount sent, percentage returned, payoff of player A, payoff of player B and the joint payoff was higher when it was repeated.

Question 4

Big 5 / OCEAN

Answer 4

Openness: curiousness/inventiveness vs. consistent and cautious
Conscientiousness: efficient/organized vs. extravagant and careless
Extraversion: outgoing/energetic vs. solitary and reserved
Agreeableness: friendly and compassionate vs. critical/rational
Neuroticism: sensitive/nervous vs resilient and confident

In terms of personality, agreeableness is a predictor of collaboration in these games.
If player 1 collaborates, this brings a higher chance of collaboration