Unit 4: Social Reactions Flashcards
Game Theory
A game is just an interaction between two people
way of understanding how people interact based on constraints limiting their actions, motives, beliefs and what others will do
there is conflict of interest and also some mutual gain
self-interest can be good or bad
Players, strategies, outcomes
players are the people playing the game
a strategy is an action a player can take
an outcome depends on the players action and actions of others
Dominant strategy
a strategy is dominant if choosing it will mean the other player will also choose it
a dominant strategy equilibrium is where all players play a dominant strategy
Nash equilibrium
a set of strategies such that each players strategy is the best response to the strategies chosen by everyone else
no player has an incentive to deviate
may be more than one NE in a game
Tragedy of the commons
overexploitation of common property/resource
social dilemma
Free riding
one person bears all the costs, but everyone enjoys the benefits
Resolving social dilemmas
altruism and social preferences to sacrifice money/lives to help others
government policy and changing the rules of the game: UK has landfill taxes, quotas on fishing cod etc
social punishment
social preferences
assume individuals are perfectly selfish
preferences on altruism not agreed on
altruism for image such as donating to charity and posting it on Facebook
Dictator game - altruism
person given £10 and asked how much they’d give to anonymous receiver
selfish subject would keep all of it
altruistic would give something
depends on whether receiver finds out if you don’t give any
what the dictator game reveals
scrutiny - knowing that someone is watching raises the moral cost of being selfish
anonymity - possible for experimenter to link earnings to behaviour
context - can’t full control context of experiment
stakes - behaviour depends on how much would be on offer
selection - those selected may be different to average person
Inequality aversion
disliking outcomes in which some individuals receive more than others
reciprocity
being kind/helpful to others who do the same for you
evaluate this according to social norms
these motives affect outcomes in the public goods game and the ultimatum game
