3,3,2,5,0 =13
GAME THEORY
RATIONALITY
- In the social sciences a rational decision is one that is considered OPTIMAL or UTILITY-MAXIMIZING
- UTILITY is a term used in economics to denote the total satisfaction that an actor derives from the goods and services
that they consume
- Individuals, firms and states are considered rational if they pursue their interests in a utility maximizing fashion
- Homo economicus, or economic man, is logically consistent but amoral
- states are economic states, and they are economic actors, meaning that they are logically consistent and amoral
RATIONAL CHOICE THEORY
- dominant theoretical paradigm in international relations
- assumptions include:
o all actions can be ranked in a preference ordering
o all preferences are transitive (if a1 > a2 > a3)
o individual has perfect information about the implications of all choices made
o individual has the cognitive ability and time to weight every choice against every other choice
- influence foreign policy decision making, especially for the US...
- Jarvis reading: move beyond assuming that actors will maximize their pay-offs, there are many variables that affect how
that decision is made
WHAT IS GAME THEORY
- Game theory is the formal study of conflict and cooperation
- Game theoretic concepts apply whenever the actions of several agents are interdependent
- Concepts of game theory provide a language to formulate, structure, analyze, and understand strategic scenarios
- Under the probability of another actor taking that action
A GAME THEORETIC MODEL
- The US makes a decision under uncertainty
o S1: Iraq has WMD
o S2: Iraq has no WMD programs
- Let us assume that intelligence reports and the administration’s beliefs lead them to conclude that S1 has a probability
of o.6 of being true, and S2: a probability of o.4
- Put into a pay-off matrix to calculate...but its all under subjective perspectives for preference
RATIONALITY AND GAME THEORY
- A central assumption in many variants of game theory is that the players are rational...
- The goal of game-theoretic analysis in these branches is to predict how the game will be played by rational players
GAME THEORY: EQUILIBRIUM
- Equilibrium is a strategy profile consisting of best strategies for each player inhte game
- Nash Equilibrium
o An outcome in which no player can unilaterally change their strategy and increase their utility
- Dominant strategy
o A strategy dominates another strategy of a player if it always gives a better payoff to that player, regardless of
what the other players are doing o It weakly dominates the other strategy if it is always at least as good
o Leads to a strategic choice not to cooperate, even when cooperation leads to a better result
- Neither leads to an optimal outcome,
- Liberals: rebuts that we don’t know the other parties preference enough
PRISONER’S DILEMMA
- Game in which mutual cooperation (CC) is not stable
- The dominant strategy for bo

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