Exam Question 2 - Who Does the Red Team Need? (1000) The Differences Between Game Theorists and - Studeersnel (2024)

Vak

Universiteit

Radboud Universiteit Nijmegen

Geüpload door:

Aanbevolen voor jou

• 8Paper / essay - Compare and contrast the perspectives or Rizvi and Van Damme on game theory - Number 9Pluralisms in EconomicsWerkstukken/Essays100% (3)
• 3Pluralisms assignment 2Pluralisms in EconomicsWerkstukken/Essays100% (1)
• 3Pluralisms assignment 4Pluralisms in EconomicsWerkstukken/Essays100% (1)
• 4Pluralisms in economics Exam Q 4Pluralisms in EconomicsWerkstukken/Essays100% (1)
• 2PIE23 - assignment 2Pluralisms in EconomicsVerplichte opgaven100% (2)

Reacties

Andere studenten bekeken ook

• Pluralisms assignment 4
• Pluralisms assignment 2
• Pluralisms assignment 1
• Pluralisms assignment 5
• Pluralisms assignment 6
• 9°assignment Pluralisms in Economics

Gerelateerde documenten

• 8°assignment Pluralisms in Economics
• 7°assignment Pluralisms in Economics
• Exam Question 1 - Cijfer: 6.3
• Pluralisms in economics Exam Q 4
• Paper / essay - Compare and contrast the perspectives or Rizvi and Van Damme on game theory - Number 9
• Paper / essay - Distinction among the mainstream orthodoxy, and heterodoxy - Number 9

Who Does the Red Team Need?

(1000)

The Differences Between Game Theorists and Experimental Economists

IntroductionThe Red Team is a research group, focusing on giving the Dutch government advice onpolicymaking regarding Covid-19. One of the initiators, Wim Schellekens, has stated that theRed Team has no interests other than preventing the spread of Covid-19 (Bremmer, 2020).The Red team combines insights from different disciplinaries to analyse what policies wouldwork best. As decision-making behaviour of people plays a big part in the success of coronarules, a game theorist or experimental economist is needed. This essay will reviewcharacteristics of both and explains why an experimental economist would be the better fit.

Game theorists versus experimental economistsEven though both game theorists and experimental economists try to predict and examinehuman behaviour in decision-making, there are many differences between the two. Firstly, they have different degrees of grasping real human behaviour. Game theoryuses a mathematical perspective to find optimal strategies. It assumes rationality, whichimplies that all people act fully rational in game theoretical models. Experimental economicson the other hand, is more practice-oriented and focusses on real experiments, thereforebetter incorporating the bounded rationality of people. As game theorists find the universallybest decisions based on theories, all humans in a game theoretic model should make thesame decisions in same situations (Rizvi, 1994). As experimental economics is based onempirical evidence, it can capture diversity in responses. In real life, people will not all actthe same way, like implied in game theory. Lastly, experiments can capture the influence ofsocial norms. Whereas in game theory, people act to maximize utility, real humans careabout how they are perceived and will change their behaviour to fit in with others (Asch,1956).

Secondly, there are differences between the economists when it comes to ‘the rulesof the game’. Whereas game theoretical models assume common knowledge among playersand assume that the rules of the game and payoffs of each action are known (Hargreaves,2017), experimental economists try to determine behavioural change based on theirexperiments, not needing the outcomes beforehand. Another condition for game-theory isthat it analyses ‘interactive decision situations in which decision-makers with conflictinginterests interact’ (van Damme, 1999), whereas actors in experimental economics do notnecessarily have conflicting interests, as is in this case. Another useful trait when conductingexperiments is that unintended consequences can be revealed. As experimental economistscapture more of the complexity of the settings and get to experience real human natureinstead of theoretical models, they get the opportunity to see reactions that cannot bepredicted based of theories. This gives them an opportunity to reveal unintendedconsequences that a game theorist will not be able to capture. Another difference whenapplying the rules of the game, is that experimental economists can change the environmentof the study. During experiments, they can control and influence different isolated factors.This way, they can see how people react to specific changes, giving them the opportunity tomeasure the impact of specific isolated factors on the change in human behaviour (Levitt &List, 2007).Thirdly, even though both ways of analysis have issues with external validity, thoseproblems with experimental economics can be solved. Levitt and List name five factors thatinfluence human behaviour so that laboratory experiments are hard to extrapolate: ‘1) thepresence of moral and ethical considerations; 2) the nature and extent of scrutiny of one’sactions by others; 3) the context in which the decision is embedded; 4) self-selection of theindividuals making the decisions; and 5) the stakes of the game’ (2007). Little evidence isfound on experiments being misleading compared to the real situations with similar features(Camerer, 2011). Camerer answered to the criticisms of Levitt and List and explained thatexperiments can control for all five factors. In game theory, researchers cannot control forthese factors, making it less generalizable.

What is needed in this case?The Red Team has one sole purpose: preventing the spread of Covid-19. They help thegovernment doing this by giving advice on what policies the government should implement.

References

Asch, S. E. (1956). Studies of independence and conformity: I. A minority of one against a unanimous majority. Psychological Monographs: General and Applied , 70 (9), 1–70. doi/10.1037/hBremmer, D. (2020, 2 oktober). Oprichter RedTeam: ‘Het ging de verkeerde kant op’. Het Parool. Geraadpleegd van paroolCamerer, C. F. (2011). The Promise and Success of Lab-Field Generalizability in Experimental Economics: A Critical Reply to Levitt and List. SSRN Electronic Journal. Published. doi/10.2139/ssrn.Hargreaves Heap, S. P. (2017). Game theory: What it reveals about what is wrong with mainstream economics. The Journal of Australian Political Economy, (80), 74–87. search.informit/doi/10.3316/informit.Levitt, S. D., & List, J. A. (2007). What Do Laboratory Experiments Measuring Social Preferences Reveal About the Real World? Journal of Economic Perspectives , 21 (2), 153–174. doi/10.1257/jep.21.2.Rizvi, S. A. T. (1994). GAME THEORY TO THE RESCUE? Contributions to Political Economy , 13 (1), 1–28. doi/10.1093/oxfordjournals.cpe.aVan Damme, E. (1999). Game Theory: The Next Stage. Economics Beyond the Millennium , 184–214. doi/10.1093/0198292112.003.