A Game Theory Solution for a Fractured America
In an opinion piece on Bloomberg Noah Smith wrote a piece about how game theory can be used as an argument for why two sides of the political spectrum could cooperate. The article prefaces by commentating on how divided the country is politically. Smith commented that the polarization is so great that it is “paralyzing policy” and “making it very hard to reform U.S. health care, the tax system and other creaking institutions.” Smith then introduced a concept from game theory known as “The Prisoner’s Dilemma”. In this hypothetical scenario prisoners in separate cells have to decide whether to cooperate or call the cops on the other inmate. The scenario is set up such that there is some incentive for either prisoner to sell out the other in the short term. But if the game is played successively it is beneficial for both prisoners if they cooperated. Smith says that the two sides of the political spectrum are like the two prisoners in the scenario. With each clash between the two sides Smith says they should eventually learn to cooperate for their own good.
As it relates to the course “The Prisoner’s Dilemma” is a good example of game theory in action. The two prisoners are simply trying to maximize their payoff. In this situation no “pure strategy” Nash equilibrium exists since either player would immediately seek to help themselves in the short term by selling out the opponent. However, upon closer inspection of the game or successive plays the prisoners can find the true equilibrium is cooperating with each other.
https://www.bloomberg.com/view/articles/2017-09-08/a-game-theory-solution-for-a-fractured-america