Game theory is a branch of mathematics that explores how to get the best outcome in a situation. It can be applied to politics and economics as well as our everyday interactions.

A GAME THEORY PROBLEM

One puzzle Game theory tackles is known as ‘The Tragedy of the Commons’. This examines how people share a common resource. It compares what happens when people share fairly, and what happens when they are selfish.

Suppose we have a small group of fishermen who share a lake. They each take fish from this lake, and sell these to earn a living. The selfish strategy would be for each person to take as many fish as they can, so they can earn more money. The fair strategy would be for each person to take the same number of fish, and only as many as they need to earn enough to live on.

WHICH IS THE BEST STRATEGY?

It might seem at first that the selfish strategy would be the best for each individual. However, if every person sharing the lake took this approach, soon there would be no fish left. With no fish to breed, no more would be born. Therefore, the fishermen would not be able to earn a living after this.

If every person followed the fair strategy, there would be enough fish left to breed. This would mean that the number of fish in the lake would be sustained. As a result, the fishermen would be able to continue to take more fish, and therefore continue to make a living.

WHY DOESN’T THIS ALWAYS HAPPEN?

Compare the above two cases. It is clear that if everyone followed the fair strategy, it would be more beneficial for all of them in the long term. So why does this not always happen?

Imagine everyone begins by following the fair strategy. Then one person decides to take more than their share, and starts using the selfish strategy. When other people see this person earning much more money, they may decide to do the same. It is not long before everyone is following the selfish strategy instead.

CONCLUSION

Game theory is all about thinking through the possible outcomes depending on the strategy used by the ‘players’ (the fishermen in this example). Here, it shows us that those sharing the lake each benefit the most in the long run when they agree to share fairly. This extends to any situation involving a shared resource. When people act selfishly, it ultimately has less benefit for everyone. That is why Game theory says we should all share fairly.