Environmental Engineering Reference
In-Depth Information
one equilibrium, provided that mixed strategies are allowed. Mixed strategies will be
explained later.
6. This section is adaptively drawn from Ostrom et al. (1994).
7. There are some problems in determining the socially optimal point. In addition to its
praxis it will depend on which and how many involved or af ected agents are introduced
to the equation. In this case, social optimality is considered the result of equating mar-
ginal social benei ts to marginal social costs of appropriators, taking appropriators to
be the individuals sharing the use of the CPR (Ostrom et al., 1994).
8. The 'prisoner's dilemma' was originally framed by Merrill Flood and Melvin Dresher in
1950. Albert W. Tucker formalized the game in an academic presentation in the 1950s
with prison sentence payof s and gave it the 'prisoner's dilemma' name. Imagine that
two suspects have been arrested by the police. The police have insui cient evidence for
a conviction, and, having separated both prisoners, visit each of them to of er the same
deal. If one testii es (defects from the other) for the prosecution against the other and
the other remains silent (cooperates with the other), the betrayer goes free and the silent
accomplice receives , say, the full ten-year sentence. If both remain silent, both prisoners
may be sentenced to only six months in jail for a minor charge. If each betrays the other,
they each receive a i ve-year sentence. Each prisoner must choose to betray the other or
to remain silent. Each one is assured that the other would not know about the betrayal
before the end of the investigation. How should the prisoners act? (For more details on
the origin and formalization of the prisoner's dilemma see Poundstone, 1992).
9. The 'chicken game', also known as the hawk-dove or snowdrift game, was i rst formal-
ized by John Maynard Smith and George Price in 1973. The principle of the game is
that while each player prefers not to yield to the other, the outcome where neither player
yields is the worst possible one for both players. The name 'chicken' has its origins in
a game in which two drivers drive towards each other on a collision course: one must
swerve, or both may die in the crash, but if one driver swerves and the other does not,
the one who swerved will be called a 'chicken', meaning a coward.
10. The 'assurance game' is a generic name after Sen (1967), for the game also known as the
stag hunt game. The French philosopher Jean Jacques Rousseau, in his 1755 writings
on inequality, presented the following situation: two hunters can either jointly hunt a
stag (an adult deer and rather large meal) or individually hunt a rabbit (tasty, but sub-
stantially less i lling). Hunting stags is quite challenging and requires mutual coopera-
tion. If either hunts a stag alone, the chance of success is minimal and thus there is the
need of cooperation and trust to achieve a larger joint benei t.
11. Non-priced/non-marketed values could be incorporated to the payof s of each
alternative.
12.
It could be argued that M is very similar to m, as the costs of monitoring for additional
activities, while monitoring anyway may be very small (decreasing marginal costs).
Even if this dif erence is small, it exists and so, for illustrative purposes, let us denote it
by using the letter M.
References
Baland, J.-M. and J.-P. Platteau (1996),
Halting Degradation of Natural Resources. Is There a
Role for Rural Communities?
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Binmore, K. (1994),
Just Playing: Game Theory and the Social Contract
, Cambridge, MA:
MIT Press.
Dawes, R.M. (1973), 'The commons dilemma game: an n-person mixed motive game with
a dominating strategy for defection',
Oregon Research Institute Research Bulletin
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13
(2),
1-12.
Maynard Smith, J. and G. Price (1973), 'The logic of animal conl ict',
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, 15-18.
Nash J. (1953), 'Non-cooperative games',
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Action
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