Unit 4 Flashcards
game theory?
way of understanding how people interact based on their constraints that limit their actions, motives and believes about what other will
social dilema?
a situation in which actions taken indipendently by self-interested individuals result in a socially suboptimal outcome
eg climate change or traffic jams
forms of social dilimas?
tragedy of the commons
free riding
altruisic?
self-sacrificing actions
strategic interaction?
social interaction where the players are aware of how their action affect both their own and other’s outcome
strategy?
a choice a player makes when they are aware of the outomes
outcome?
situation that result from the combination of both player’s strategy
payoffs?
earned by each player for each possible outcome
best response?
strategy that will give a player the highest playoff, given the strategy of the opponent
dominant strategy?
strategy that will give player the highest payoff, irrespective of the opponent’s strategy
dominant strategy equilibrium?
an outcome where all players play their dominant strategy
nash equilibrium?
no player has the incentive to change their strategy
dominant strategy equilibrium is a nash equilibrium
prisoner’s dilemma?
both player’s dominant strategy is to play the same option
social preferences?
- altruism
- reciprocity
- inequality aversion
- spite
resolving social dilemmas?
social preferences
repitition
institutions
