Social Interactions Flashcards
What is the Tragedy of the Commons?
Tragedy of the Commons: common property or common resources are often over-exploited.
What is the Free Rider Problem?
Free Rider Problem: one person bears all the costs while everyone enjoys the benefits.
How is a social interaction defined?
A social interaction is defined as a situation involving more than one person/party, where one’s actions affect both their own and other people’s outcomes.
How is a strategic interaction defined?
A strategic interaction is defined as a situation where people are aware of how their actions affect others and take this into account when making choices.
How is a strategy defined?
Action(s) that people take when engaging in a social interaction.
What is a dominant strategy?
A dominant strategy (if there is one) is the choice that would yield the most benefits to a player across the available situations.
What is a nash equilibrium?
Nash equilibrium: A set of strategies (one per player), such that each player’s strategy is the best response to the strategies chosen by everyone else.
What is the social optimum?
The social optimum is the outcome which maximises the sum of the payoffs of the two agents.
What is a Prisoner’s Dilemma?
A game with a dominant strategy equilibrium, in which playing the dominant strategy yields lower individual and total payoffs compared to other strategies.
What assumptions drive the failure to achieve the social optimum, and what are potential solutions?
- Players only care about their own pay-offs. Potential solution: introduce social preferences.
- Nobody could make players pay for the consequences of their actions on others. Potential solution: introduce repeated games, social norms and peer punishment
- Players could not co-ordinate their decisions beforehand. Potential solution: change the rules of the game (i.e. through institutions and policies)
What is the Kantian imperative in relation to altruistic social preferences?
Kantian Imperative: pursuing a duty to that which, if universalised, would achieve the social optimum.
What is a sequential game?
A sequential game is one in which agents do not determine their moves simultaneously but instead one agent moves first and the other agent, observing the action of the first, then selects their own action.
