Unit 4 Strategic interactions and social dilemmas

Question 1

Social dilemmas

Answer 1

situation where actions are taken independently to fulfil their private objectives result in an inferior outcome that may be achieved through collaboration
- solved with altruism

Question 2

Game theory

Answer 2

way of modelling strategic interactions

Question 3

Specifics of games

Answer 3

• the players
• the feasible strategies
• the info
• the payoffs

Question 4

Nash equilibrium

Answer 4

• overlap of the players’ best responses
  no player would benefit from unilaterally changing their current action

Question 5

Pareto-efficienct

Answer 5

no alternative where at least 1 party would be better off and none would be worse off

Question 6

Conflict of interest

Answer 6

more than 1 nash equilibrium