Game Theory and Politics
Game Theory, when this term comes up the first thing that comes into our mind is "Prisoner's Dilemma", a satiation where individual decision makers always have an incentive to choose in a way that creates a less than optimal outcome for the individual groups. It is a concept that occurs in many aspects of the economy. You might be wondering what this Theory has to do with Politics.
Before getting into the relation between the Game theory and Politics, let us first understand what Game theory is.
What is Game theory?
Game theory is a framework for conceiving social situations among competing players. It is a science strategy, or at least the optimal decision making of independent and competing actors (people) in a strategic setting. The focus on the game theory is the game, which serves as a model of an interactive situation among rational players. The key to the game theory is that one player's payoff is contingent on the strategy implemented bu the other player. The game identifies the players identities, preferences, and available strategies and how these strategies affect the outcome. Depending on the model, various other requirements or assumptions may be necessary. Game theory has a wide range of applications, including psychology, evolutionary biology, war, politics, economics, and business. Despite its many advances, game theory is still a young and developing field.
Let us start by defining few terms,
- Game: Any set of circumstances that has a result dependent on the actions of two or more decision makers (players)
- Players: A strategic decision maker within the context of the game
- Strategy: A complete plan of action a player will take given the set of circumstances that might arise within the game
- Payoff: The payout a player receiving from arriving a particular outcome (can be any quantifiable form)
- Information Set: The information available at a given point in the game. The term is most usually applied when game has a sequential component.
- Equilibrium: The point in a game where both players have made their decisions and an outcome is reached.
Now coming to the topic, Game theory and Politics
The application of Game theory to Political Science is focused in the overlapping areas of fair division, political economy, public choice, war bargaining, positive political theory, and social choice theory. In each of these areas, researchers have developed game theoretic models in which the players are often voters, states, spacial interest groups, and politicians.
A game theoretic explanation for democratic peace is that public and open debate in democracies sends clear and reliable information regarding their intentions of other states. In contrast, it is difficult to know the intentions of nondemocratic leaders, what effect concessions will have, and if promises will be kept. This there will be mistrust and unwillingness to make concessions if at least one of the parties in a dispute is a non-democracy.
However, game theory predicts that two countries may still go to war even if their leaders are cognizant of the costs of fighting. War may result from asymmetric information; two countries may have incentives to mis-represent the amount of military resources they have on hand, rendering them unable to settle disputes agreeably without resorting to fighting. Moreover, war may arise because of commitment problems: if two countries wish to settle a dispute via peaceful means, but each wishes to go back on the terms of that settlement, they may have no choice but to resort to warfare. Finally, war may result from issue indivisibilities.
Game theory could also help predict a nation's responses when there is a new rule or law to be applied to the nation. One example is Peter John Wood's (2013) research looking into what nations could do to help reduce climate change. Wood thought this could be accomplished by making treaties with other nations to reduce greenhouse gas emissions. However, he concluded that this idea could not work because it would create a prisoner's dilemma for the nations.
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