Pricing
Game Theory
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Abstract
Let’s play a game! This game, called Tragedy of the Commons, simulates the upkeep of a common resource, and probably wouldn’t guarantee hours of fun for the whole family, but understanding it can tell us a lot about human behavior. There are several players (your breakout room), and all of the gameplay happens at once. Each of you will choose one of the following two choices: “Cooperate” or “Defect,” and send either “C” or “D” to your breakout room instructor in chat, without letting anyone else know your choice. Once the instructor has heard from everybody, they announce the results. Everybody who cooperated loses a point (the cost of donating to maintain some shared resource). Then the number of people who cooperated is tallied up, call it c. Everybody then gets 2c points, because everybody profits from this shared resource, regardless of whether they contributed. The goal is to maximize your score (your ranking among the players is irrelevant no one player wins).