midterm Flashcards
A type of game in which players benefit from coordinating their actions but lack a dominant strategy. Players seek to achieve a mutually beneficial outcome through cooperation.
Assurance Game
The limitation on choices imposed by the availability of resources. Individuals must make decisions within the constraints of their budget or available resources.
Budget Constraint
A social dilemma situation where players engage in a risky game, hoping that the other player will yield to avoid a disastrous outcome. It contrasts with assurance games as there is no clear dominant strategy.
Chicken Game
The pursuit of common goals or interests by a group of individuals. Collective action problems arise when individuals have an incentive to free-ride rather than contribute to the collective effort.
Collective Action:
Resources that are collectively owned or managed by a group of individuals. These resources often face the problem of overuse or depletion due to the lack of clear property rights.
Common Pool Resources
In a Prisoner’s Dilemma game, cooperation involves choosing an action that benefits both players, while defection involves choosing an action that benefits oneself at the expense of the other player.
Cooperation/Defect in a PD Game:
A strategy that yields the highest payoff for a player regardless of the actions chosen by other players. Players have a dominant strategy when one strategy always leads to a better outcome, irrespective of the opponent’s choice.
Dominant Strategy
The average outcome of a decision weighted by the probabilities of different possible outcomes.
Expected Value
Individuals who benefit from a public good or collective action without contributing to its provision. Free riders exploit the contributions of others without bearing the costs themselves.
Free Riders (or Free Riding)
The voter whose preferences lie at the midpoint of the ideological spectrum. In a majority voting system, the median voter’s preference often determines the outcome of an election.
Median Voter
An allocation of resources or outcomes in which at least one individual is made better off without making any other individual worse off.
Pareto Improvement
A state of resource allocation in which no further Pareto improvements are possible, meaning that it is impossible to make one individual better off without making another individual worse off.
Pareto Optimality:
Political leaders may use various strategies to overcome collective action problems, such as offering incentives, providing leadership, or implementing policies that align individual and collective interests.
Political Leaders Overcoming Collective Action Problem:
The subjective rankings or evaluations individuals have regarding different options or outcomes. Preferences determine the choices individuals make in pursuit of their goals or interests.
Preferences
A classic game theory scenario where two rational players each have an incentive to defect, resulting in a suboptimal outcome for both, even though mutual cooperation would yield a better overall result.
Prisoner Dilemma Game
