Competition vs Cooperation
April 16, 2011

“Competition undermines sustainability in the long term.” — Dr. Joseph Tainter

Introduction to Game Theory

LECTURE DESCRIPTION: We introduce Game Theory by playing a game. We organize the game into players, their strategies, and their goals or payoffs; and we learn that we should decide what our goals are before we make choices. With some plausible payoffs, our game is a prisoners’ dilemma. We learn that we should never choose a dominated strategy; but that rational play by rational players can lead to bad outcomes. We discuss some prisoners’ dilemmas in the real world and some possible real-world remedies. With other plausible payoffs, our game is a coordination problem and has very different outcomes: so different payoffs matter. We often need to think, not only about our own payoffs, but also others’ payoffs. We should put ourselves in others’ shoes and try to predict what they will do. This is the essence of strategic thinking.

Course Materials

Interactive Prisoner’s Dilemma Game

Evolutionary Stability: Cooperation, Mutation, and Equilibrium

[blip.tv http://blip.tv/play/g4A_1qFgjvMg%5D

LECTURE DESCRIPTION: We discuss evolution and game theory, and introduce the concept of evolutionary stability. We ask what kinds of strategies are evolutionarily stable, and how this idea from biology relates to concepts from economics like domination and Nash equilibrium.

Course Materials

Evolutionary Stability: Social Convention, Aggression, and Cycles

[blip.tv http://blip.tv/play/g4A_2KN5jvMg%5D
http://oyc.yale.edu/economics/econ-159/lecture-12

LECTURE DESCRIPTION: We apply the idea of evolutionary stability to consider the evolution of social conventions. Then we consider games that involve aggressive (Hawk) and passive (Dove) strategies, finding that sometimes, evolutionary populations are mixed. We discuss how such games can help us to predict how behavior might vary across settings. Finally, we consider a game in which there is no evolutionary stable population and discuss an example from nature.

Course Materials

Interactive Evolution Games

Beyond the Tragedy of the Commons with Nobel Laureate Elinor Ostrom

“That all persons call the same thing mine in the sense in which each does so may be a fine thing, but it is impracticable; or if the words are taken in the other sense, such a unity in no way conduces to harmony. And there is another objection to the proposal. For that which is common to the greatest number has the least care bestowed upon it. Every one thinks chiefly of his own, hardly at all of the common interest; and only when he is himself concerned as an individual. For besides other considerations, everybody is more inclined to neglect the duty which he expects another to fulfill; as in families many attendants are often less useful than a few.”

— Aristotle, Politics, Book II, Chapter III, 1261b

Elinor Ostrom, a political scientist from Indiana University and winner of the 2009 Nobel Memorial Prize in Economic Sciences, looks at a variety of research into why some groups self-organize and others do not, and the relevance of the theory of collective action to the governance and management of natural resources.

Ostrom is considered one of the leading scholars of common pool resources–forests, fisheries, oil fields, grazing lands, and irrigation systems. In particular, her work emphasizes how humans interact with ecosystems to maintain long-term sustainable resource yields.

Collective Action and the Commons: What Have We Learned? (Ostrom @ Cornell, 2009)

Companion Powerpoint (From Ostrom’s Tanner Lecture @ Stanford, 2011):

“The Challenge of Sustainability: Frameworks”

Abstract: Currently, the scientific approaches to the study of sustainability of complex ecological systems and complex socioeconomic systems are quite disparate. Over time, biology and ecology have accepted the necessity of understanding complex systems in developing a nested, scientific language to study them. Over time, many of the social studies that focus on the question of sustainable ecosystems or the sustainability of market systems or political systems have attempted instead to develop the simplest possible models and theories to explain what is occurring in the world over time.

The biological and ecological sciences have been extremely successful in understanding ecological systems that are remote, and thus, not strongly affected by human action. When humans play a major role, both the biological sciences and the social sciences are lacking effective theories and explanations of failures as well as successes.

One of the steps necessary to solve this problem is the development of a shared language that links what is going on in regard to resource systems and resource units with what is going on in relationship to governance systems and actors as they jointly affect action situations, incentives, and outcomes.

In this first lecture, Ostrom will review some of the work being done to build a better framework for understanding complex ecological and socioeconomic systems.

Elinor Ostrom Delivers Her Nobel Prize Lecture

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