While I have learned about Game Theory in several of my classes in my collegiate career (environmental studies, microeconomics, leadership, and social sciences, and several other courses) this text refreshed my memory and introduced me to new and interesting situations in Game Theory.
The “Free Rider” scenario had completely slipped my mind and I am still unsure how to feel about the situation. The text described a situation where one member of a neighborhood rents a large dumpster for their own personal use and then multiple other members of the neighborhood put their small garbage into the dumpster; there is still plenty of room for the personal use of the member who rented the dumpster. They explain that this becomes a problem when the whole neighborhood utilizes the communal resource of the dumpster, to the point where there is not enough room for the member who rented it. The reason this scenario is a tough one for me to grasp is that when people do not take complete advantage of a situation and it isn’t a functional problem for the dumpster owner then it makes plenty of sence- especially when you think of the alternatives like littering and that dumpster space being left unused. It makes me wonder if there were any characteristics or circumstances where the free-rider situation could be mutually beneficial. The text mentioned how the free rider scenario applies to credit card fraud. I personally do not completely understand this example and would like to as it is a prominent issue in the world today.
Chicken and Nash’s Equilibrium:
I watched the film, Beautiful Mind for the first time about two years ago in my IB Psychology class. The film depicts Nash’s moment of epitome when he is at a grad school bar with a group of other graduate students and he visualizes the scenario. This is how I have always thought of the Nash Equilibrium as I ama very visual person. In economics, the Nash Equilibrium makes a lot of sense to me when you think about the guarantee of every party benefiting in some way. Yet, I never thought about the Nash Equilibrium in the context of War as mentioned in the text.
The Free Rider dilemma is also puzzling to me because I do not know if it always morally harmful. I can think of scenarios where it may be beneficial, like carpooling, but one person is not contributing so is there arguably a moral issue? It is much more clear to me when used in the context of credit card theft, when there is a more clear right and wrong.