3 Games: T R S P
3 Games: T R S P
trivial, but two games stand out: Obviously, rational responders should
accept even the smallest positive offer, since
• Chicken (T > R > S > P ) the alternative is getting nothing. Pro-
posers, therefore, should be able to claim
C D almost the entire sum. In a large num-
C R=2, R=2 S=1, T=3 ber of human studies, however, conducted
D T=3, S=1 P=0, P=0 with different incentives in different coun-
tries, the majority of proposers offer 40 to
Example: Two drivers with something to 50 % of the total sum, and about half of
prove drive at each other on a narrow all responders reject offers below 30 %
road. The first to swerve loses faces among
his peers (the chicken). If neither swerves, 3.3 Public Good Game
however, the obvious worst case will oc-
A group of 4 people are given $ 200 each
cur.
to participate in a group investment project.
• Stag Hunt (R > T > P > S) They are told that they could keep any
money they do not invest. The rules of
C D the game are that every $1 invested will
C R=3, R=3 S=0, T=2 yield $ 2, but that these proceeds would
D T=2, S=0 P=1, P=1 be distributed to all group members. If
every one invested, each would get $ 400.
However, if only one person invested, that
Example: Two hunters can either jointly “sucker” would take home a mere $ 100.
hunt a stag or individually hunt a rabbit. Thus, the assumed Nash equilibrium could
Hunting stags is quite challenging and re- be the combination of strategies, where
quires mutual cooperation. Both need to no one invests any money. And we can
stay in position and not be tempted by show that this is indeed the Nash equilib-
a running rabbit. Hunting stags is most rium.
beneficial for society but requires a lot of We will not display this game in a pay-
trust among its members. The dilemma off matrix, since each player has a too big
exists because you are afraid of the oth- set of strategies (the strategy sn is given
ers’ defection. Thus, it is also called trust by the amount of money that player n
dilemma. wants to contribute, e.g. s1 = 10 means,
that player 1 invests 10 $). Nevertheless
3.2 The Ultimatum Game this is a game in normal form and there-
Imagine you and a friend of yours are fore it has a payoff function for each player.
walking down the street, when suddenly The payoff function for, let’s say, player 1
a stranger stops you and wants to play a is given by
game with you:
He offers you 100 $ and you have to 2 · (s1 + s2 + s3 + s4 )
agree on how to split this money. You, P = − s1
4
as the proposer, make an offer to your 2 · (s2 + s3 + s4 )
friend, the responder. If he accepts your = − 0, 5 · s1
4
offer, the deal goes ahead. If your friend
rejects, neither player gets anything. The But this means, that every investment
stranger will take back his money and the s1 of player 1 will diminish his payoff.
game is over. Therefore, a rational player will choose
4 EVOLUTIONARY GAME THEORY 8