About SIM – Strategic Interaction introduces the concept of strategic interactio

About
SIM – Strategic Interaction introduces the concept of strategic interaction (a concept directly related to game theoryLinks to an external site.) to explain instances of “games” between political actors that are non-cooperative, in a single or multiple time periods, and with complete or incomplete information.
While cooperative games allow political actors to establish binding agreements before playing, non-cooperative games do not allow for binding agreements with each other before playing. We will focus on non-cooperative games.
Estimated Time
An estimated 4 hours is needed to complete this activity.
What is Strategic Interaction?
In a general sense, strategic interaction is about how two political actors interact, given how the other political actors interacts.
Below is a figure that shows 4 different types of strategic interactions based on 2 variables: number of times periods (one or many), and level of information (complete or incomplete).
Four Types of Non-cooperative Games:
Cell #1 is when there is a one time period and complete information. This is also called a static game of complete information.
Cell #2 is when there is one time period and incomplete information. This is also called a static game of incomplete information.
Cell #3 is when there are many time periods and complete information. This is also called a dynamic game of complete information.
Cell #4 is when there are many time periods and incomplete information. This is also called a dynamic game of incomplete information.
Example 1: Static Game of Complete Information (Cell #1)
Imagine you are walking on the sidewalk from your residence to a nearby park. Now consider that another person is also walking on the same sidewalk, but in the opposite direction (or towards you).
They are walking from the park back to their residence. As you and the other person approach each other, you both have one of two choices to make: either move to the left or move to the right.
The question is: How do you decide which of these two choices to make? The answer is that it depends on what choice the other person makes.
If the other person moves to the right, which way would you move?
If the other person moves to the left, which way would you move?
This is one examples of non-cooperative strategic interaction in a single time period with complete information because you are making your choice in a single moment and with completely observing which way the other person moves. And same is true for the other person.
Example 2: Static Game of Incomplete Information (Cell #2)
Imagine there are two political actors: the President of the United States and the Congress. The President must decide whether to threaten vetoing legislation working its way through Congress, knowing that the Congress could ignore his threat, pass legislation, and override his veto. On the other hand, the Congress must decide whether or not to pass the legislation, knowing the president is threatening a veto it.
While both political actors know each other’s actions (i.e. President can veto or sign the legislation, and Congress can override a veto), both political actors may not know which action each other is likely to take. Both actors need to choose at the exact same time which action they will take. Therefore, because it unknown to both actors what their likely action is, this is a static game of incomplete information.
Here are some questions to consider when trying to determine which choices both actors will take:
If Congress assumes the President will not veto, then what action should Congress take?
If Congress assumes the President will veto, then what action should Congress take?
If the President assumes the Congress will not pass legislation, then what action should the President take?
If the President assumes the Congress will pass legislation, then what action should the President take?
Example 3: Dynamic Game of Complete Information (Cell #3)
Dynamic games are fundamentally different from statics games because there is at least two time periods, or stages, where one political actor must decide what action to take, given the action another political actors has already taken. In other words, unlike the prior examples, where both political actors need to simultaneously need to decide what action to take, dynamic games are were actions are taken sequentially (one actor after another actor).
Consider that there are two political actors: the Federal Government and the Public. The Public needs to decide whether to protest the federal government peacefully or riotously. And the federal government needs to decide whether or not to crack down on the protest, given whether the public is protesting peacefully or riotously.
In a two-time period game, the Public first decides whether to protest peacefully or riotously. In the second time period, the Federal Government decides whether to crack down soft or crack down hard based on the Public’s action.
Here are some questions to consider when trying to determine which choice each actor will make:
When the Public is deciding to protest calmly or riotously, they should take into account the Federal Government likely response to both protest forms. Why?
When the Federal Government is deciding to crack down “soft” or “hard”, they decide their action based on the Public’s action. Why?
Imagine that a 3rd time period introduced to this game. During this 3rd time period, the Public must decide to “retreat” or “fight”. How will the addition of a 3rd stage effect the Public’s choice in stage 1?
Imagine that a 3rd time period introduced to this game. During this 3rd time period, the Public must decide to “retreat” or “fight”. How will the addition of a 3rd stage effect the Federal Government’s choice in stage 2?
Example 4: Dynamic Game of Incomplete Information (Cell #4)
Dynamic games of incomplete information are different because, again, there are at least two time periods, but both political actors are now lacking some information about the other player’s information or actions.
To fill the gap created by incomplete information, player’s need to form “beliefs” about other players, beliefs which are based on what is observed. For example, imagine you have two countries that have a history of cooperation, but over more recent years, they are starting to second-guess each other’s motives and willingness to continuing cooperating. These two countries are in a dynamic game since they interact during each period.
However, as time progresses, the two countries are sharing less and less information, thereby moving from a complete information setting, to incomplete information setting. In an incomplete information game, players now need to rely in their “beliefs” of the other player’s actions and payoffs.
While beliefs can range from the implausible to the plausible, both countries should use more plausible beliefs to determine the actions and payoffs of the other players. However, when a country forms their beliefs about the other country, there can be “noise” or “error” that lead to beliefs that are less plausible.
Using the explanation above, answer the following questions:Why would two countries, who have a history of cooperating, slowly begin to not cooperate?
Why does cooperating reveal more information, while not cooperating reveal less information?
What beliefs should country 1 have about country 2? Why?
What beliefs should country 2 have about country 1? Why?
Instructions
Step 1: Select a non-cooperative game type
Choose one of the four non-cooperative game types listed above that you are most interested in. In your 1stsentence, clearly declare the game type you selected.
Step 2: Explain why you selected a particular game type
In 5 or more sentences, explain why you selected a particular game type.
Below are some questions to ask yourself to help you write out 5 or more sentences:How does your game type choice compare or contrast with other game types?
What do you think of the example provided for the game type you selected?
How does your game type choice relate to your daily life or experiences?
How can you apply your game type choice to a strategic interaction you are currently engaged in at home, school, or work?