Rational Choice and Game Theory Flashcards
Where did rational choice theory start?
an economic model
Rational choice is a grand theory of _______
human behaviour
Rational choice theory claims it ______
models human behaviour and can explain and predict it with math
What does rational choice theory assume a group bases its actions on?
aggregate of individual actors’ behaviour
______ represent that combination of choice and chance that characterize competition and negotiation
games
How many players do you need for a game
two or more
What are some general examples of games at the state-level
treaties, alliances
Rational theory describes humans as :
- rational (not impulsive or conditioned)
- self-interested
- utility maximizers
- risk-averse
- not influenced by culture, ideology, ethnicity or religion
Does rational choice theory argue that given the same circumstances, people would react the same or differently?
same
T or F: An individual is assumed to usually have preferences about which choice to makes
F: assumed to ALWAYS have preferences
What does preferences are transitive mean?
if a person prefers option A to B and B to C, they will prefer A to C
What does a person use to decide the best course of action?
available information, a calculation of probabilities, and a cost-benefit analysis
Humans are creatures of _______ behaviour
economic
economics =
dismal science
Where does rational choice theory fall in the spectrum of realism and liberalism?
Isn’t either, but has more overlap with realism
-realism doesn’t buy into assumptions of human behaviour
In games, everyone is assumed to have what information?
imperfect information
In games, how does information play a role?
-imperfect information undermines trust
What happens if one side knows more than the other in games and what is it called?
-asymmetric information
games become more complex
How does one obtain extra information about rivals in games?
surveillance/spying
Due to lack of information players will ___________ to figure each other out
use strategic thinking
Describe the Prisoner’s dilemma
- Two prisoners are being offered a plea deal from the police
- if Person A confesses while person B stays silent, Person B goes to jail for 10 years, while Person A goes free
- if they both confess, they both get 5 years in jail
- if neither confesses they both get 1 year in jail
- usually both confess because imperfect information and fear of worst-case scenario keep optimal outcome (both quiet) from happening
In IR ______ is most important
trust
rational choice theory can teach players about sub-optimal outcomes to help them ______________
overcome mutual mistrust
What’s an example of players coordinating to share information?
-hotline between JFK and Kruschev during the Cold War to reduce/overcome mistrust, increase communication, and share true intentions
What generally about games can affect players’ behaviour?
whether or not they are going to play again in the future
“iterated games”
What are the costs of cheating in a game?
-threat of punishment/punishment via trade deals (being kicked out, fined, penalized)
When do games get more difficult?
In matters of life and death, people get very concerned with survival
Describe the Stag Hunt
- origin: Jean-Jacques Rousseau
- a group of hunters hunt a stag
- hunt takes commitment: track, find, overcome; the hunt drags on
- a hare runs by; individual hunters are tempted to quit (defect) and chase the hare
- chasing the hare is equivalent to pursue a smaller payoff out of fear of not receiving big payoff (stag)
- if they kill the stag together, they will all eat, if one kills the hare, others will starve (only one person benefits with the hare)
- represents a collective action problem: personal vs. collective action
What is an example of a collective action problem today?
Climate Change
- economic sacrifice for collective gain (averting climate change)
- -people are tempted to defect for economic gain (exploiting resources)
- -economic sacrifice varies–makes it more difficult
What is a game of chicken?
two sides engage in risky behaviour, who will back down first?
In games of chicken, what are players motivated by:
- getting what they want
2. Reputation
What is a general example of a game of chicken?
two cars racing towards each other on a one-lane highway
What is a specific example of a game of chicken?
Greek debt crisis
- Greek Finance Minister Varoufakis was a game theorist economist
- appeared willing to bring the entire European economy crashing down to make his negotiating partners give in
- Varoufakis assumed that if Greece defaulted on its debt, European investors would worry about contagion to other countries (Portugal, Spain, Italy)
- Varoufakis claimed Greece had a surplus and its economy could function without EU help–thought Greece had the upperhand
- European investors were not worried that Greek default would spread–they could wait
- ECB did not keep Greek banks going, Greek banks were running out of money
- Greece went into a steep recession: surplus disappeared
- Crisis peaked in June 2015 as national debt hit 323 Bn Euros
- Greece could not wait out the crisis: they were forced to accept EU terms of austerity (cutting spending)
What game theorist scholars did we study?
Dixit et al
