Chapter 2. Research Design and Methodology 2.1. Introduction
U. S.S.R Cooperate Defect
2.3 Previous Researches on Game Theory and Stag-Hunt
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As an assurance game, it presents more than one Nash equilibrium,
cooperate/cooperate and defect/defect, among which both players will prefer the
situation in which both countries cooperate, which provides the biggest payoff. The
problem is that the defect strategy is less risky if they are not sure about the other
player’s intentions, and thus the defect/defect equilibrium is the probable outcome of
the game if other measures are not taken (e.g. confidence building measures,
monitoring, verification, etc.). We will talk again about this when applying assurance
games (in form of stag-hunt game) to our case study in the next chapter.
This model also reflects the classical model of the stag-hunt, which uses the same
table, strategies (cooperate or defect), and payoffs. As we consider that the situation of
SLOCs cooperation in SCS can be better described using the context from the
stag-hunt game, therefore, during the case study we will use this game to explain the
similarities and differences between it and the real situation in the region. The reasons
for choosing this game will be explained in the following section.
2.3 Previous Researches on Game Theory and Stag-Hunt
Much of the literature about game theory is based on theoretical situations or
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laboratory experiments that present, describe, and analyze models to predict the
probable strategies used by the players. Although exist real applications of game
theory to real problems, they do not exactly fit the situation we present in this study:
to achieve cooperation on securing sea lines of communication. In spite of this,
previous findings can facilitate our research by shedding light over the way to apply
the stag-hunt model on the SCS dispute.
Albers and Busby (2010), present a similar situation to the one that we analyze in our
proposal of securing sea lines of communication, that is how to provide security from
wildfires to a common, a public landscape (in our case this resembles to securing the
SLOCs), which has some private urban interference (in our case this resembles to
different stakeholders’ vessels using the sea lines), and at the same time avoiding the
private stakeholder to become a free rider (in our case this is represented by those
countries who do not contribute to SLOCs protection). They show how public
resources focus on those zones with mixed ownership, which causes high cost for
society, while private ownerships avoid the payment of securing their own territory.
Contrary to these authors’ situation, our case study does not have a superior authority
to manage and compel all the stakeholders to protect the SLOCs, making the problem
of avoiding free riders more difficult to overcome.
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The number of actors willing to initiate cooperation from the beginning is also an
important factor. Becker and Easter (1999), use game theory to evaluate the
possibility of cooperation for managing international water resources like the Great
Lakes. They found that even when the non-cooperative solution is the dominant
strategy; when coalitions are formed from a subset of participants cooperation is
easier, and even the remaining players realize that is better for their own interest to
cooperate.
On the other hand, in order to achieve cooperation for a common good, some studies
show that the trust each actor has on others is an essential factor. Bosworth (2013)
argues that the more trusting people can facilitate the provision of more public goods,
demonstrating this in experimental situations similar to the stag-hunt game, in which
players with high trust on others tend to contribute more to achieve general interests.
Moreover, in relation to assurance games, Borstein (2013) experimentally supports
the idea that the temptation to defect for fear to other player’s strategy, is countered by
both players’ preferences for obtaining better payoffs in the mutual cooperation
situation, which is easier to reach when communication between disputant groups is
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allowed.
Finally, according to Madani (2010), although our research is focused on the stag-hunt
model, it is also important to take into account the evolution of the situation through
different periods of time, due to its characteristics and structure can change, making
that the theoretical model that better fits to the reality can be changing among
stag-hunt, prisoners’ dilemma, chicken game, or others, something that eventually will
be also reflected in the stakeholder’s behaviors, and thus, changing player’s
preferences for the different strategies, which eventually will lead to different
outcomes.
In sum, previous uses of game theory, and specifically the stag hunt-model, highlight
the relevance of the number of actors initiating cooperation to cause a positive
spillover effect on others, give importance to trust between participants to facilitate
coordination and thus boost the provision of a public good, support that
communication facilitates all players to obtain better outcomes in assurance games,
and advice to pay attention to the evolution of the situation, due to it can fit better to
other theoretical models in different periods of time.
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These previous findings in the game theory literature are taken into account during
this research in chapter 4 in order to create the theoretical framework that shapes the
rules of the game for SLOCs cooperation in SCS. The stag-hunt model is the one we
consider at present best fits to the SLOCs security cooperation, due to its cooperative
strategy can provide more safety for the SLOCs than individual actions from each
player, this mean that it allows to expand the pie, increasing the payoffs of all
stakeholders, something that cannot be easily done with the resources and sovereignty
issues, which respond better to prisoners’ dilemma or chicken games in which
cooperation is more difficult to attain.