Game Theory — dilemma in enviromental problem
The 2009 United Nations Climate Change Conference, commonly known as the Copenhagen Summit, was held at the Bella Center in Copenhagen, Denmark, between 7 and 18 December. The purpose of the conference is straightly towards one crucial problem nowadays — over-emissions of carbon dioxide.
What causes the over-emission of carbon dioxide and other enviromental polluted problem? Somebody may argue that unmarality enterprise shoube be blamed for these problem.
However, the theory of tragedy of the commons could perfectly explain these problem and even reveal that these kind of problem has no technical solution.
This economics theory was first proposed by Garrett Hardin. The theory was according to which individuals, acting independently and rationally according to each one’s self-interest, behave contrary to the whole group’s long-term best interests by depleting some common resource.
Take pollution game for example. We can now consider every country is an player in this game. Assumed that there are n countries, the strategy for them is either control the pollution of air or not. If they choose to control the polution, it would cost them 3, otherwise the pollution would add 1 to the cost of all countries(including the original one).
The dominate strategy for the game is simple. Since whatever other country would control or not, do not control for our country would certainly cost less. Thus the equlibrium for the game is every country choose not to control for the pollution which leads all country suffer from total n cost.
We can see that game theory perfectly explain why the enviromental problem become more and more severe. But happily we could see that more and more country espeically those developing country such as China are paying more and more attention in control of pollution. These can also be explained by Game theory because the cost not to control for enviromental deterioation are increasing due to higher living standard level of people. For this reason the cost not to control for the pollution become larger which change the payoff and affects the equilibrium.
In future I’m confident that the enviromental problem nowadays will be solved and the marality cost for using commons good will become larger!
Related links:
http://en.wikipedia.org/wiki/Tragedy_of_the_commons
http://www.sciencemag.org/content/162/3859/1243.full
reference book:
Nisan, Noam, et al., eds. Algorithmic game theory. Cambridge University Press, 2007.