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ECON1000 Tri2A 2023 – GTP Brief

A. Context and Overview

The Game Theory Presentation (GTP) is worth 30% of the final mark.

The GTP is a ‘take-home’ exercise with a set of tasks to do. The GTP is based on Lecture Topics: L1 and L2. You will have twenty (21) days to complete the GTP on your own.

§ Assessment brief available on Blackboard (Bb): 21^st July 2023, 11:59pm.

§ Clarifications of and indirect guidance on GTP in L2(a) and L2(b) tutorials: Week 4 of July 24^th to 28^th; Week 5 of July 31^st to August 4^th.

§ Due date/time of GTP: Word Document to Turnitin by Week 6 Friday 11^th of August, 11:59pm (SG Time).

§ ETA of marks/feedback on your GTP in Grade Centre is by Monday 4^th September, 9pm.

A general guide on what the marker is looking for in the GTP is recalling the tutor-student discussions in the workshop sessions: WAQ_1 and WAQ_2 of Module L1; WAQ_2 of Module L2(a); and WAQ_1 and WAQ_2 of Module L2(b). Your tutor as an exemplar would have gone through the process on how best to explain the payoff matrices, and so on.

To do the GTP, complete the tasks set out in this assessment by yourself, and then submit it to Turnitin by the due date: include your Full Name and Student ID as a title in the Word document when submitting your work (see Assessments tab on Bb).

Note, the word count is a suggested maximum. The main thing is that you answer the question and have sufficient explanations. For more information, see PDF on Bb, “Marking Guidance and FAQs for GTP Tri2A 2023”.

B. Assessment Tasks

Part 1 – 10 Marks

Read the following key article 1:

https://qz.com/2099301/game-theory-says-the-paris-agreement-might-be-a-climate-winner/.

Your game theory tasks for Part 1 are as follows:

You are to construct a relevant payoff matrix (in numbers only) based on key article 1.

To help you construct the payoff matrix, here are the key parameters and assumptions:

§ There are two players – ‘Player 1’ is the US, and ‘Player 2’ is other countries.

§ There are two strategies – ‘decarbonise’ (DC) or ‘nearly business-as-usual’ (NBAU).

o Each strategy has an associated payoff.

§ Assume this climate change game is played over the next couple of years and is framed from the viewpoint of an optimistic game theorist.

Think of this as a simultaneously played game: this is a game played once and is repeated more than once, yet the rules, players, and payoffs are the same each time.

In this game, you will need to work out what the associated numerical (hypothetical) payoffs are. Explain in words each quadrant and any specific outcome you come across.

            [Part 1 word count suggestion: 500 to 700] [10 marks]

Part 2 – 20 Marks

Your game theory tasks for Part 2 are as follows:

Read the following key article 2:

https://www.politico.com/news/magazine/2022/04/21/russia-sanctions-game-theory-00026566.

You are to construct a relevant payoff matrix (in numbers only) for the Russia-NATO strategic game described in key article 2. To help you construct the payoff matrix, here are the key parameters and assumptions:

§ There are two players – ‘Player 1’ is Russia, and ‘Player 2’ is NATO.

§ Each player has a different set of strategies:

o ‘Player 1’ can either ‘transgress’ or ‘not transgress’.

o ‘Player 2’ can either ‘sanction’ or ‘not punish’.

§ Each strategy has an associated payoff.

§ Assume that players act rationally.

Think of this as a sequentially played game with multiple rounds: ‘Player 1’ chooses a strategy first, and then the ‘Player 2’ moves.

In this game, you will need to work out what the associated numerical (hypothetical) payoffs are. Explain what the likely outcome of this game is when: (a) Russia transgresses; and (b) Russia chooses not to transgress. In each case (a) and (b), compare the payoffs in the quadrants for likely outcome vs. the unlikely outcome of the game. Do some additional research and discuss several reasons as to why and what sanctions against Russia are an appropriate policy choice.

                         [Part 2 word count suggestion: 800 to 1000] [20 marks]