Game Theory for Social Scientists

Most political scientists agree that, contrary to John Lennon's famous song “Imagine,” the world does not always “live as one.” But why is this so? Why does war occur even though it is clearly costly? Why do different ethnic groups attempt to eliminate each other? Why does foreign aid sometimes fail to help the targeted countries? “Imperfect world” also occur in advanced democracies. Why is it that the American Congress had, time and again, failed to provide universal health care and stricter gun control? Why is it that some opposition parties failed to “get its act together” and win elections, even when opinion polls goes against the government? Why do parties sometimes failed to reach a coalition agreement with other parties?

Game theory is an attractive methodological tool for explaining suboptimal political outcomes. It gives actors the benefit of the doubt: even smart people can make logical but harmful decisions. With game theory, we no longer need to rely on using event-specific factors to explain phenomena that could otherwise be interpreted in a systematic manner. This increases our ability to accurately predict event occurrence. In short, game theory offers us the tools for explaining phenomena with more parsimonious conditions, thereby reducing our need for using ad hoc explanations for events that occur across countries and over time. This approach also allows us to spell out the logic of our arguments for why certain political events occur. It gives us the tools to spell out the mechanism and forces us to lay out the theoretical assumptions that are often hidden in our arguments. By doing so, game theory helps us to make sense of political events that are counter-intuitive and of phenomena that seems to be the result of irrational actors.

Because of its above-mentioned usefulness, game theory has become a common analytical apparatus in a wide range of political science research, including legislative behaviour, coalition formation and termination, political violence, authoritarian regime breakdown, and international security. Yet, while one can often understand the game theoretic models’ basic logic, the finer ideas may become lost in the mathematical formulations if one does not have extensive training in economics or mathematics. This not only limits scholars’ ability to offer insightful critiques of the theories embedded in formal models, but may deter them from using game theory as a means for checking their arguments’ logical consistency.

Therefore, this course will offer the tools for dissecting game theoretic models in political science articles, and also the skills to construct these kind of models in their own research. These involve determining the importance of ad hoc, case-specific elements when explaining political events, building theoretical arguments with explicitly stated assumptions, formulating concise and coherent mechanisms, and producing a set of testable predictions. To do so, this course will cover five basic types of games in detail. They are extensive form (sequential) games, normal form (simultaneous) games, repeated games, Bayesian games, and games with imperfect information.

This course will utilise empirical examples to introduce the games and supply plenty of exercises to ensure a full grasp of the games’ mechanisms. These exercises are the key to developing the skillset necessary for building your own games, since the only way to gauge whether you have truly understood the concepts is to apply what you have learned to different settings. The more time you put in to these exercises, the more you will be able to grasp both the technical aspects and the intuitions behind the solution concepts, and to apply them for building your own game theoretic models in the future.

Although this course has mathematical pre-requisites, there is no need to be intimidated by them! The math is often the least challenging aspect of game theory. The most demanding part is unpacking the logic behind the games, and for this you will receive plenty of support from your fellow students and (of course) your instructor.

It is essential that you be adept at solving algebraic equations, including solving a set of simultaneous equation. If you are rusty, now is a good time to revisit these topics. For algebra practice, any decent high school text will be sufficient.