- Q&A of this Topic
- View International Relations
- View Political Science
- View All Subject
1. Game Theory
1.1. Prisoner’s Dilemma: An Example of the Zero-Sum Game
1.2. Basic Features
2. Evaluation of Game Theory.
3. Decision Making Theory.
3.1. Basic Assumptions
4. Evaluation of Decision Making Theory
Select Langauge
Hey champs! you’re in the right place. I know how overwhelming exams can feel—books piling up, last-minute panic, and everything seems messy. I’ve been there too, coming from the same college and background as you, so I completely understand how stressful this time can be.
That’s why I joined Examopedia—to help solve the common problems students face and provide content that’s clear, reliable, and easy to understand. Here, you’ll find notes, examples, scholars, and free flashcards which are updated & revised to make your prep smoother and less stressful.
You’re not alone in this journey, and your feedback helps us improve every day at Examopedia.
Forever grateful ♥
Janvi Singhi
Give Your Feedback!!
Topic – Game Theory and Decision Making Theory (Notes)
Subject – Political Science
(International Relations)
Table of Contents
Game Theory
- Originally conceived by the Hungarian–American mathematician John Von Neumann, game theory has been widely applied in social sciences since the 1950s.
- At later stages, the theory was reinforced by the works of scholars like Osker Morgenstern, Anatol Rapoport, Martin Shubik, and John Nash.
- The theory has been useful in analysing situations of conflict, competition, and cooperation.
- It became popular with social scientists because for every society and every state, these issues are important.
- The theory also finds its application in International Relations (IR), because conflict, competition, and cooperation among nation-states form important areas of discussion in the discipline.
- Game theory helps in explaining and addressing social problems.
- Since games often reflect real situations—especially competitive or cooperative situations—they can suggest strategies or ways for dealing with such circumstances.
- As we may understand the strategy of players in a particular game, we may also be able to predict how people, political factions, or nation-states will behave in a given situation.
- Situations in the real world, including international relations, may replicate any game.
- Just as players try to win games, people in real life also try to win or achieve goals in competitive situations.
- However, both in games and in the real world, we have to follow a set of rules to pursue and achieve our interests or goals.
- Some games, like some real situations, are intensely competitive, where only one player can win — Chess is an example.
- Other games, like football or baseball, require cooperation to win.
- Similarly, in the real world, some situations demand cooperation even during hostility; because rivals may share common interests, and must cooperate to some degree for such interests.
- During the Cold War, despite an intense East–West rivalry, America and the Soviet Union had to cooperate to achieve their common interest of averting a nuclear war.
- Game theory supports a decision-making approach based on the assumption of rationality of players in a competitive situation.
- Each player tries to maximize gains or minimize losses under conditions of uncertainty and incomplete information.
- This situation requires each player to rank preferences, estimate probabilities, and try to discern the opponent’s move.
- During the Cold War, both the US and the USSR played such a game of ‘one-upmanship’.
- Both wanted to maximize gains or minimize losses under uncertainty.
- The game theory suggests several types of games:
- Two-person zero-sum game: what one player wins, the other loses; e.g., if A wins 7, B loses 7, and the outcome is zero.
- The ‘Prisoner’s Dilemma’ is an example of this zero-sum game.
- Two-person non-zero or variable sum game: gains and losses are not necessarily equal; both sides may gain — a positive-sum game.
- In some games, both parties may lose, and by different amounts or degrees.
- The n-person game includes more than two actors or sides.
IR today resembles, to some extent, the n-person game.
- Game theory may help in examining strategic interactions among two or more participants.
- By using easy, sometimes numerical models to study complex social (including international) relations, this theory can analyse the potential for, and dangers of, cooperative behaviour among distrustful and competing participants.
- It has five major concepts:
i. Players or decision-makers;
ii. Strategies available to each player, which take into account the potential behaviour of opponents;
iii. Rules governing players’ behaviour;
iv. Outcome, each of which is a result of particular choices made by players at a given point in the game;
v. Pay-off, accrued by each player as a result of each possible outcome. - The theory assumes that in any game, each player would pursue strategies within a set of rules that help him or her to achieve the most profitable outcome in every situation and get the maximum pay-offs.
- In the field of International Relations (IR), nation-states are the players or actors who pursue strategies to achieve the most profitable outcome.
- In order to achieve a mutually productive outcome, the states must coordinate their strategies, because if each state pursues its greatest potential pay-offs, the shared outcome is unproductive.
- This confusion has been illustrated by the ‘Prisoner’s Dilemma’ game.
- This and other games illustrate the potential for cooperation to produce mutually beneficial outcomes.
- However, they also highlight the difficulties of obtaining cooperation among distrustful participants, because each player is tempted to pursue individual interests.
- Cooperation requires that both players compromise, and forego individual maximum pay-offs.
- Yet, in compromising, each player risks complete loss if the opponent decides to seek the maximum pay-off.
- Rather than risking total loss, players tend to prefer the less productive outcome.
Prisoner’s Dilemma: An Example of the Zero-Sum Game
- ‘Prisoner’s dilemma’ is one of the important games propagated by the game theory.
- It illustrates the paradoxical nature of interaction between two suspicious participants with opposing interests.
- In this hypothetical situation, two accomplices in a crime are imprisoned, and they enter into a pact not to betray one another and not to confess the crime.
- The severity of the punishment that each may receive is determined not only by their behaviour, but also by the behaviour of their accomplices.
- The two prisoners are separated and cannot communicate with each other.
- Each is provided with four possible outcomes:
i. If one confesses to the crime and puts the blame on the accomplice—thereby defecting from the pact—their sentence would be reduced;
ii. If one confesses, but their accomplice does not—that is, the accomplice cooperates with the pact not to betray each other—the first prisoner can strike a deal with the police and would be set free. But the information they provide will be used against the second prisoner, who would receive the maximum punishment;
iii. If both individuals confess to the crime—that is, both defect from their pact—then each receives a reduced sentence, but no one is set free;
iv. If neither confesses to the crime—that is, they cooperate—then each prisoner receives minimum sentence because of the lack of evidence. - This option may not be equally attractive to either person, as the chance of striking a deal with the police and being set free at the expense of one’s partner is wasted.
- Since the prisoners are not in a position to communicate with each other, the question of whether to ‘trust’ the other not to confess is the most crucial aspect of the game.
- The game prisoner’s dilemma can be used to examine complex situations in international relations like strategic interactions and arms race between countries.
- If two rival countries build up their stock of armaments in uncontrolled ways, they increase the potential for mutual loss and destruction.
- For each country, the gain of arming itself is decreased because the costs of arming—financial costs, increased security tensions, greater mutual destructive capabilities—provide few advantages over the opponent, resulting in an unproductive outcome.
- However, each country has a choice here—either to cooperate to control arms build-up, with the goal of achieving mutual benefits, or defect from the pact and build armaments.
- The dilemma stems from the realization that if one country arms itself (defects) and the other does not (cooperates), the country that builds armaments will be considered stronger and will win the game.
- If both cooperate, the best possible outcome is a tie.
- This is better than the pay-off from mutual defection and an arms race, but it is not as attractive as winning.
- The temptation to beat one’s opponent in the arms race is always present.
- The fear that one’s opponent will give in to such temptations often drives both nations to arms, because not doing so risks total loss.
- The benefits of not arming can only be realized if one’s opponent overcomes the temptation to win.
- Such trust is often lacking in international politics.
- The supporters of the game theory cite the US–Soviet relationship as an example of the game ‘prisoner’s dilemma’.
- During the Cold War, the two countries never trusted each other.
- Each country spent astronomical amounts to arm itself, fearing that the other one was doing the same, and not wanting to lag behind.
- But the cost incurred in the arms race was so high that it eventually made one player (Soviet Union) run bankrupt.
- Had both the nations trusted each other, much of the arms race—as also financial losses and security tensions for both and also for the rest of the world—could have been avoided.
- However, the lessons initially drawn from the game ‘prisoner’s dilemma’ can be discouraging.
- The game illustrates a zero-sum situation, in which one player must lose for the other to win.
- To keep from losing, each player is motivated to pursue a ‘winning’ strategy.
- The collective result is unproductive at best, and destructive at worst.
- However, an extended version of the game ‘prisoner’s dilemma’ calls for repeated interaction, which enhances the probability of cooperative behaviour.
- The logic of this version of the game suggests that a player’s strategy (to defect or cooperate) depends on his experience in previous interactions, and that strategy will also affect the future behaviour of the opponent.
- The result is a relationship of mutual reciprocity.
- An actor is likely to cooperate if the opponent had wanted to cooperate previously, and is unlikely to cooperate if the opponent had not.
- The assumption that the game will be played again leads players (actors) to consider the consequences of their actions.
- An opponent may retaliate or be unwilling to cooperate in the future, if one actor always seeks maximum pay-offs at the expense of the other player.
- This analysis of the game theory leads us to identify some characteristics of the theory along with its main proponents, which are presented.
International Relations Membership Required
You must be a International Relations member to access this content.
Already a member? Log in here