1. Discussion
Real-life examples from the news that differ in problem structure terms used from last class
From Newspaper of your choice
Two INTERNATIONAL problems that illustrate one of the differences we have discussed

2. Outline Problem structure from Game Theory perspective
Reviewing 8 key questions

3. Key questions of problem structure
Q1: Is it conflict, cooperation, or harmony?
Q2: Who are the actors?
Q3: Absolute capacities and relative power
Q4: Incentives/preferences
Q5: Information/knowledge
Q6: Norms
Q7: Inherent transparency
Q8: Response incentives

4. ROW’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
R gets 2 yr
R gets 10 yr
R gets 0 yr
R gets 5 yr

5. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
C gets 0 yr
C gets 10 yr
C gets 5 yr

6. OVERALL GAME COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
R gets 2 yr
C gets 0 yr
R gets 10 yr
C gets 10 yr
R gets 0 yr
C gets 5 yr
R gets 5 yr

7. ROW’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
R gets 2 yr
R gets 10 yr
R gets 0 yr
R gets 5 yr
What should Row do?

8. ROW’S PERSPECTIVE COLUMN Confess (Defect) Silence (Cooperate)
R gets 10 yr
R gets 5 yr
First, assume Column confessed. What should Row do?

9. ROW’S PERSPECTIVE COLUMN Confess (Defect) Silence (Cooperate)
R gets 10 yr
R gets 5 yr
If Column confessed, Row clearly prefers to Confess.

10. ROW’S PERSPECTIVE COLUMN Silence (Cooperate) R gets 2 yr ROW Confess
(Defect)
R gets 0 yr
Now, assume Column stayed silent. What should Row do?

11. ROW’S PERSPECTIVE COLUMN Silence (Cooperate) R gets 2 yr ROW Confess
(Defect)
R gets 0 yr
If Column stayed silent, Row still prefers to Confess.

12. ROW’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
R gets 2 yr
R gets 10 yr
R gets 0 yr
R gets 5 yr
So, no matter what Column does, Row prefers to Confess!

13. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
C gets 0 yr
C gets 10 yr
C gets 5 yr
What should Column do?

14. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 10 yr
C gets 5 yr
First, assume Row confessed. What should Column do?

15. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 10 yr
C gets 5 yr
If Row confessed, Column clearly prefers to Confess.

16. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
C gets 0 yr
Now, assume Row stayed silent. What should Column do?

17. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
C gets 0 yr
If Row stayed silent, Column still prefers to Confess.

18. COLUMN’S PERSPECTIVE COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
C gets 0 yr
C gets 10 yr
C gets 5 yr
So, no matter what Row does, Column prefers to Confess!

19. OVERALL GAME COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
R gets 2 yr
C gets 0 yr
R gets 10 yr
C gets 10 yr
R gets 0 yr
C gets 5 yr
R gets 5 yr
BUT, since both Column and Row confess, they end up both getting 5 years,

20. OVERALL GAME COLUMN Silence (Cooperate) Confess (Defect) ROW
C gets 2 yr
R gets 2 yr
C gets 0 yr
R gets 10 yr
C gets 10 yr
R gets 0 yr
C gets 5 yr
R gets 5 yr
BUT, since both Column and Row confess, they end up both getting 5 years, even though they both would prefer 2 years!

21. Question 1: Is it conflict?
Is it conflict or would it be if no institution?
Is it harmony?
If conflict, is it Deadlock, i.e., unresolvable?
Potential for resolution REQUIRES absolute gains frame

22. Stop engaging in conflict Continue engaging in conflict
Deadlock
Stop engaging in conflict
Continue engaging in conflict 2 4 1 3

23. Harmony Allow education of foreigners in your universities
Allow education of foreigners in your universities
Do not allow education of foreigners in your universities 4 2 3 1

24. Q2: Actors
Who is involved? What actors are causing or affected by the problem? Who could help fix the problem?
What roles do actors have?
Perpetrator (fishing countries, upstream polluting state)
Victim (other fishing countries, downstream states)
Vested interests (US in Middle East)
Could be interested (debt for nature swaps)
Uninterestable (landlocked African states and whaling)
Types of actors
Many problems due to actions by governments
Others due to non-government actors
Differ in whose behavior must be controlled and relationship between governments who create institutions and actors who must change behavior

25. Q3: Capacities and power
Do “perpetrators” of problem have capacity to engage in “good” behavior?
If not, it’s a “Positive Externality Plagued by Incapacity”. E.g.,
Protecting accidental detonation of nuclear weapons
Reducing AIDS in developing countries
Helping small countries defend selves from attack
Behavior not a result of logic of consequences or logic of appropriateness

26. Positive Externality Plagued by Incapacity
Incapable state =>
Capable state –V
Contribute to AIDS prevention (but NOT POSSIBLE)
Don't contribute to AIDS prevention
Contribute to AIDS prevention 4 3 2 1

27. Q4: Incentives
How do material consequences for perpetrators depend on other countries?
Types of incentive problems
Upstream / downstream
Coordination
Collaboration
All involve logic of consequences issues

28. Upstream/Downstream Upstream ==> Downstream -V
Contribute to pollution reduction
Don't contribute to pollution reduction 1 4 3 2

29. Train pilots in Row Language Train pilots in Col Language
Coordination
Train pilots in Row Language
Train pilots in Col Language 3 4 2 1

30. Collaboration
Maintain
Low Tariffs
High Tariffs 3 4 1 2

31. Q5: Information/knowledge
Any unknown effects that perpetrators would care about if they knew about them?
Two types of info/knowledge problems
Epistemic/knowledge problems (unsure about how the world works): e.g., acid rain in Europe, trade wars, health quarantine regulations
Assurance problems (unsure about how other actors will behave): e.g., war games
Largely still logic of consequences

32. Q6: Norms
Problem is not material consequences but violations of values and notions of legitimacy
Normative problems involve “conflicts over values”, e.g.,
Human rights abuses
Apartheid or treatment of women
Choice of government
Involves logic of appropriateness

33. Q7: Inherent Transparency
Inherent transparency and ability to act secretly
Before any institution at all, does each actor know what other actor is doing?
Compare
Security: nuclear weapons vs. war games
Trade: tariffs/quotas vs. NTBs/subsidies
HR: civil/political vs. economic/social

34. Q8: Response Incentives
If there is a violation, do those harmed have sufficient incentives to respond? What are consequences if institution rules violated?
Weak incentives to respond to HR and environmental violations but strong for trade and VERY strong for weaponry
Notice that in weapons agreements the “response” is implicit ending of agreement
Cost of responding vs. cost of not responding

35. Types of problem Review
Deadlock
Positive externality plagued by incapacity
Upstream / downstream problems
Coordination
Collaboration
Epistemic / knowledge problems
Assurance problems
Normative problems