Global Challenges | Understanding

Sacrifice

Individuals voluntarily make sacrifices for others

cooperation

individuals coordinate their actions for mutual benefit

coercion

individuals are forced to take actions that benefit others

social dilemma

a situation where an individual's self-interested choice leads to a poor outcome for the group, even though cooperation would have been better for everyone

selfishness

when she lacks kindness toward, and responsibility for others

rationality

a person is this if she takes actions that are consistent with her goals

irrationality reason 1

to forget or neglect the goals one has

irrationality reason 2

to draw wrong conclusions from the information at hand

irrationality reason 3

to hold incorrect beliefs for other reasons

expected utility theory

describes the decision-makers preferences through a utility function and the beliefs through a probability function in choosing highest expected utility

duty

when authority forbids/advises against some action, people may feel bad about taking that action regardless of any sanctions

logic of appropriateness

when an individual does what society asks (infinite social pressure)

logic of consequences

when the individual focuses entirely on attaining her own goals (no social pressure)

externality ( negative or positive )

when a person’s action has an impact on somebody else’s utility

efficiency

if there does not exist another outcome that is better

A social situation (or called a game form) comprises three elements

• 1) the people involved in the situation (the players)

• 2) the informations and actions that are available to them ( the strategies) 

• 3) the potential results of those actions (the consequences)

A game (game form)

 a social situation together with a utility function for each player

magical reasoning

the idea that players act as if their own choices influence their opponents' choices, even when there is no logical causal link

altruism

selfless concern for the well-being of others, often involving actions that benefit others at a personal cost or risk to oneself

egalitarianism

the belief that all people are equal and should have the same rights, opportunities, and status

dutifulness

acting a certain way because it feels “right”

social esteem

the status rewarding behaviors that observe collective norms and guaranty the integrity of social functions

cooperation

if each member of the group takes an action that benefits(given what they do), even though that action is not certain to benefit oneself

shared understanding

the collective interpretation of strategies and outcomes that members of a society recognize as relevant

values

how society ranks or judges strategies and outcomes

prescriptive norms / institutions

rules specifying what people should or should not do

Reality (level 1)

Everything that has happened, could happen, or will happen —the objective world

Expectations

what individuals believe other will do in a given situation

culture

the shared understandings and values of a social group; determines what is considered acceptable or moral

formal institutions

written, codified, or legally defined rules such as laws, constitutions, regulations or contracts

informal institutions

unwritten, socially recognized rules such as customs, conventions, etc.

strong institutions

rules that are actually obeyed and respected —real or “de facto” authority

weak institutions

rules that exist on paper that are ignored or unenforced —”nominal” institutions

internalised norms

social norms or values that individuals have personally adopted; they are followed without external enforcement

externalised norms

rules enforced through external punishment or reward rather than internal moral obligation

generalized morality

a culture-wide emphasis on tolerance, honesty, and respect for others

dominant strategy

a strategy that always provides a higher payoff than any other, regardless of what others do

dominated strategy

a strategy that always yields worse outcomes than other available options

weakly dominant

a strategy that is never worse and sometimes better

weakly dominated strategy

a strategy that is never better and sometimes worse

nash equilibrium

a set of strategies where no player can improve their outcome by unilaterally changing their strategy

pure strategy nash equilibrium

an equilibrium where players choose specific strategies

mixed motive game

a game where players share some interests but also have conflicting preferences

multi-stage game

a game played over multiple rounds or stages, where players act with knowledge of previous actions

subgame

a portion of a larger game that can be analyzed independently once earlier actions are known

subgame-perfect equilibrium

a nash equilibrium that holds in every subgame —found using backward induction

anarchy

a situation without central authority or enforcement; individuals rely solely on their own strength for protection

state of nature

the condition of society before laws of governance—often marked by insecurity and conflict

hobbesian solution

the idea that a strong ruler or sovereign can maintain order by enforcing rules and punishing defection

social contract

an agreement among individuals to form institutions or government to ensure collective safety and order

changing the game

altering the structure, rules, or payoffs of a social situation to change outcomes

reciprocity

the tendency to reward cooperative behavior, or punish uncooperative behavior

positive reciprocity

rewarding good or fair actions even at a personal cost—rooted in gratitude or duty

negative reciprocity

punishing unfair or selfish actions even at personal cost — rooted in grievance or duty

trust game

a game modeling trust and cooperation, where one player entrusts resources to another, who may reciprocate or exploit that trust

punishment game

a game modeling negative reciprocity — players can penalize unfairness even at their own expense

grievance

a player’s tendency to retaliate or punish unfair treatment, even without personal gain

dutiful punishment

punishing wrongdoing because it is seen as morally right or socially required

promise of payment

a voluntary commitment to future cooperation or reward; relies on moral cost if broken

hold-up problem

a situation where one party hesitates to invest or cooperate because they fear being exploited after committing resources

coercion game

a game in which one player forces another to act through threats or power imbalance

ultimatum

a threat-based negotiation tactic: if demands aren’t met, the player walks away or imposes costs 

coordination

aligning actions among individuals to reach mutually beneficial outcomes

common interests

situations where all players prefer the same equilibrium (easier to coordinate)

conflicting interests

situations where players prefer different equilibria (harder to coordinate)

cheap talk

communication that doesn’t bind players to their statements; not enforceable

self-committing message

a message where the sender truly wants to follow through if the receiver believes them

self-signaling message

a message sent only if the sender genuinely intends to act as stated

common awareness

when all players know some fact, know that others know it, and so on infinitely — crucial for coordination

clarity

the accuracy and mutual understanding of communication among players

authority

the capacity to issue messages or orders that others are expected to follow

nominal authority (formal authority)

When messages should be obeyed (monarch, captain)

real authority (practical authority)

when messages are actually obeyed because followers choose to comply

absolute authority

when a player can always induce their preferred outcome at any stage of the game

hold-up problem (authority)

authority figures may promise fairness but later renege — power without checks enables exploitation