A Game Theory Warning to Blind Drivers Playing Chicken With Public Goods. Issue 3 (12th March 2019)

• Record Type: Journal Article
• Authors: Ristić, Bora; Madani, Kaveh
• Is Part Of: Water resources research. Volume 55:Issue 3(2019)
• Page Start: 2000
• Page End: 2013
• Publication Date: 2019-03-12
• Subjects: foresight -- public goods -- game theory -- linked games -- strategic loss; Hydrology -- Periodicals; 333.91
• DOI: 10.1029/2018WR023575
• Languages: English
• ISSNs: 0043-1397

Abstract

Abstract: We develop a game theoretic model of the role of foresight in games involving users interacting over a public good. Previous research in this area has applied game theory to understand social dilemmas and inform policy initiatives. However, considerations of the "evolving structure" of natural resource games over time and agents' planning horizon raises the complexity of game analysis substantially and has often been overlooked. We analyze a simple model of an irrigation system shared by two users and consider how players will act under different levels of foresight. Without foresight into game changes over time, players are blind to the fact that they are in a game of chicken. We model agents with foresight by interconnecting games across time and show how this creates opportunities for "strategic loss" early on, allowing players with foresight to reduce total costs. High future costs can thus be avoided with foresight if the rising costs of inaction are made apparent. We consider the effect of discounting and differences between players to provide policy recommendations regarding incentives for foresight. Key Points: Myopic stakeholders allow public goods to deteriorate not realizing they are in a long‐term game of chicken Foresight allows them to resolve conflicts earlier and cheaper through strategic loss The incentive for foresight is ambiguous, depending on differentiation between players