Game Theory & U.N. Climate Negotations
In class, we discussed game theory and how one can predict how people will make decisions. This article discusses how a team of economists from Europe believe that they can predict the outcome of the negotiations occurring in Paris.
To begin with, the economists considered the different positions of the countries and thought about each respective country’s pros and cons. They considered what they would get out of any decision made and the losses that they would have. With all of this in mind, they assigned each country a value. They they ran these values through game theory models in order to predict what would actually occur. These economists, however, have not revealed their predictions publically, but it will be interesting to see how accurate they are. They will be releasing them around November.
Although this seems like a good idea, and in a completely rational world, this theory would be perfect, the world does not work this way. The article says that decisions are also based on “things like political momentum and the reality of fatigued hungover diplomats”. It is more difficult than purely the math of game theory to predict their decisions. However, in 2009, two economics predicted the outcome of the negotiations made in Copenhagen. It was unfortunate because the predictions that they made were weak and not beneficial for our world.
As you can see, game theory is used in many different contexts. Even though the math behind game theory is always right, it does not mean that the predictions that it makes are always right. There are always other factors that need to be taken into account because this world is not entirely rational.
http://grist.org/news/can-game-theory-predict-what-will-happen-at-the-un-climate-negotiations/