Rational Choice and Game Theory

Question 1

Where did rational choice theory start?

Answer 1

an economic model

Question 2

Rational choice is a grand theory of _______

Answer 2

human behaviour

Question 3

Rational choice theory claims it ______

Answer 3

models human behaviour and can explain and predict it with math

Question 4

What does rational choice theory assume a group bases its actions on?

Answer 4

aggregate of individual actors’ behaviour

Question 5

______ represent that combination of choice and chance that characterize competition and negotiation

Answer 5

games

Question 6

How many players do you need for a game

Answer 6

two or more

Question 7

What are some general examples of games at the state-level

Answer 7

treaties, alliances

Question 8

Rational theory describes humans as :

Answer 8

• rational (not impulsive or conditioned)
• self-interested
• utility maximizers
• risk-averse
• not influenced by culture, ideology, ethnicity or religion

Question 9

Does rational choice theory argue that given the same circumstances, people would react the same or differently?

Answer 9

same

Question 10

T or F: An individual is assumed to usually have preferences about which choice to makes

Answer 10

F: assumed to ALWAYS have preferences

Question 11

What does preferences are transitive mean?

Answer 11

if a person prefers option A to B and B to C, they will prefer A to C

Question 12

What does a person use to decide the best course of action?

Answer 12

available information, a calculation of probabilities, and a cost-benefit analysis

Question 13

Humans are creatures of _______ behaviour

Answer 13

economic

Question 14

economics =

Answer 14

dismal science

Question 15

Where does rational choice theory fall in the spectrum of realism and liberalism?

Answer 15

Isn’t either, but has more overlap with realism

-realism doesn’t buy into assumptions of human behaviour

Question 16

In games, everyone is assumed to have what information?

Answer 16

imperfect information

Question 17

In games, how does information play a role?

Answer 17

-imperfect information undermines trust

Question 18

What happens if one side knows more than the other in games and what is it called?

Answer 18

-asymmetric information

games become more complex

Question 19

How does one obtain extra information about rivals in games?

Answer 19

surveillance/spying

Question 20

Due to lack of information players will ___________ to figure each other out

Answer 20

use strategic thinking

Question 21

Describe the Prisoner’s dilemma

Answer 21

• Two prisoners are being offered a plea deal from the police
• if Person A confesses while person B stays silent, Person B goes to jail for 10 years, while Person A goes free
• if they both confess, they both get 5 years in jail
• if neither confesses they both get 1 year in jail
• usually both confess because imperfect information and fear of worst-case scenario keep optimal outcome (both quiet) from happening

Question 22

In IR ______ is most important

Answer 22

trust

Question 23

rational choice theory can teach players about sub-optimal outcomes to help them ______________

Answer 23

overcome mutual mistrust

Question 24

What’s an example of players coordinating to share information?

Answer 24

-hotline between JFK and Kruschev during the Cold War to reduce/overcome mistrust, increase communication, and share true intentions

Question 25

What generally about games can affect players’ behaviour?

Answer 25

whether or not they are going to play again in the future

“iterated games”

Question 26

What are the costs of cheating in a game?

Answer 26

-threat of punishment/punishment via trade deals (being kicked out, fined, penalized)

Question 27

When do games get more difficult?

Answer 27

In matters of life and death, people get very concerned with survival

Question 28

Describe the Stag Hunt

Answer 28

• origin: Jean-Jacques Rousseau
• a group of hunters hunt a stag
• hunt takes commitment: track, find, overcome; the hunt drags on
• a hare runs by; individual hunters are tempted to quit (defect) and chase the hare
• chasing the hare is equivalent to pursue a smaller payoff out of fear of not receiving big payoff (stag)
• if they kill the stag together, they will all eat, if one kills the hare, others will starve (only one person benefits with the hare)
• represents a collective action problem: personal vs. collective action

Question 29

What is an example of a collective action problem today?

Answer 29

Climate Change

• economic sacrifice for collective gain (averting climate change)
• -people are tempted to defect for economic gain (exploiting resources)
• -economic sacrifice varies–makes it more difficult

Question 30

What is a game of chicken?

Answer 30

two sides engage in risky behaviour, who will back down first?

Question 31

In games of chicken, what are players motivated by:

Answer 31

1. getting what they want

2. Reputation

Question 32

What is a general example of a game of chicken?

Answer 32

two cars racing towards each other on a one-lane highway

Question 33

What is a specific example of a game of chicken?

Answer 33

Greek debt crisis

• Greek Finance Minister Varoufakis was a game theorist economist
• appeared willing to bring the entire European economy crashing down to make his negotiating partners give in
• Varoufakis assumed that if Greece defaulted on its debt, European investors would worry about contagion to other countries (Portugal, Spain, Italy)
• Varoufakis claimed Greece had a surplus and its economy could function without EU help–thought Greece had the upperhand
• European investors were not worried that Greek default would spread–they could wait
• ECB did not keep Greek banks going, Greek banks were running out of money
• Greece went into a steep recession: surplus disappeared
• Crisis peaked in June 2015 as national debt hit 323 Bn Euros
• Greece could not wait out the crisis: they were forced to accept EU terms of austerity (cutting spending)

Question 34

What game theorist scholars did we study?

Answer 34

Dixit et al