Game Theory and Conservation

Class 11

Presentation 1

Outline Introduction to game theory Prisoners’ dilemma activity Examples of successful

conservation/poverty alleviation work Use of game theory to evaluate

conservation work

History of Game theory Fairly long history

von Neumann, J., and O. Morgenstern (1944), Theory of Games and Economic Behavior. Princeton: Princeton University Press

Qualitative opinion based analyses to quantification

Provides quantification of decisions and outcomes

Evaluation of simple rules that govern choice and complexity of outcomes

A beautiful mind: John Nash

What is “Game” Game = scientific metaphor for wide range

of human (today any interaction) interactions in which the outcome depends on interactive strategies (interactions) of 2 or more people (or items such as atoms, organisms, populations) who have different (properties or adaptations) motives.

Why game theory? Useful way to model interactions between

organisms and people Also used in many other disciplines and

endeavours: economy, computer science, sociology, international trade, negotiations, evolutionary biology, physics, etc.

Game theory Applies when:

2 or more players One player: decision

More than one outcome (e.g. someone wins while another loses)

Outcomes depend on the choices of all players

Players have choice, strategy matters

Where you cannot use game theory Games of chance (e.g. lotteries: no strategy

required) Games without interaction between players

(e.g. solitaire)

Elements of game theory Must know the number of players List and description of all possible actions

by individual player Information players have before decision Description of payoff consequences to each

player for every action Description of players preferences

Elements of game theory Players can have perfect information on

other players decisions (e.g. chess) Players can have imperfect information

(e.g. sealed bids, prisoners’ dilemma) Rules are known to all players Players seek to maximize their payoff Payoffs are known and fixed

Prisoners’ Dilemma Two prisoners, each in a different cell Must decide:

Confess Do not confess

Both confess: 6 months jail each Both do not confess: 1 month jail each 1st confess, 2nd not: 2nd gets 9 months 1st does not, 2nd does: 1st gets 9 months jail

Prisoners’ Dilemma Assume that you are one of the prisoners On a piece of paper write down if you

would confess or not confess

Prisoners’ dilemma matrixPrisoner 2

Confess

Prisoner 2

Do not confess

Prisoner 1

Confess

6,6 months 0,9 months

Prisoner 1

Do not confess

9,0 months 1,1

Note Note that you thought about the decision

the other person would make Game theory allows us to analyze not only

individual decisions within market conditions (for resource use) but also based on the strategies chosen by others

Prisoners’ dilemma Is very simplistic (unrealistic) but it can provide

insights into interactions Other games that can be modelled Applicable in: Tragedy of the commons Environmental pollution Population growth, consumerism Nuclear arms race Others?

"The Tragedy of the Commons," Garrett Hardin, Science, 162(1968):1243-1248

To read Hardin’s classic paper click on: http://www.constitution.org/cmt/tragcomm.htm

Commons: property such as land owned collectively

History of International Aid Post WWII

Keynesian Developmentalism (1940-1960) Macro economics at global level Sought to reduce gap between developing and

developed nations Aim: increase economic development through

modernization, agro-exports, and primary exports of raw resources

Solutions: Donor countries Focus: industrial, large landowner, export E.g: agriculture and timber plantations,

Neoliberalism (1950–1970) Similar to earlier programs Focus: development, western technology,

exports No recognition of local knowledge Replacement of indigenous flora and fauna

with exotics Some recognition of communal property

Popular Development (1970–present) Recognized complexity of development Started to involve local people Solutions: local area Use of local technology Short term targets

Communal Areas Management Programme for Indigenous Resources Project (CAMPFIRE), Zimbabwe

Zimbabwe: in southern Africa Used to be a British colony Wildlife owned by state Wildlife important for tourism Direct worth: $250 million US/yr Most habitat and wildlife outside parks

Project (CAMPFIRE), Zimbabwe Agriculture most important economic

sector Cattle ranching subsidized Degraded arid lands Game killed to control tse-tse fly Law changed in 1961 Conservation Act

allowed ranchers to ranch, kill and sell game

Project (CAMPFIRE), Zimbabwe Game ranching not profitable (cost of transport) Safari-hunting profitable 1975 Parks and Wildlife Act delegated control of

safari hunting to large landowners This program proved successful CAMPFIRE sought to implement similar benefits

on communal lands

Project (CAMPFIRE), Zimbabwe Dept of National Parks and Wildlife Management

recognized that wildlife could be conserved only if communal and private landowners derived benefit

Project aim: transfer benefits to local communities

Caution: Recent decisions by Zim. Govt. not to protect property rights may undermine this programme

Project (CAMPFIRE), Zimbabwe Community membership defined with local

groups Defined household Revenue sharing procedures National office then devolved management

and revenue to local groups for safari hunting in community

Project (CAMPFIRE), Zimbabwe National govt benefited through higher tax

revenue Locals benefited: Z$ 200/household/yr New school, grinding mill

Project (CAMPFIRE), Zimbabwe Has not worked where benefits minimal to

locals E.g.:Nyaminyami District in the Zambezi

Valley Revenue sharing not satisfactory to all

Work of the Watershed Organization Trust (WOTR) in Ahmendnagar

Rural Development: WOTR

Jan 10-14’01

Housing before

Living quarters for 7 peopleFloor and walls: mud

Before

Landscape denuded

Local cattle

Before: Water & fuelCow dung for fuel

Wells run dry after January

Before Several attempts on improving the

conditions of these people E.g. introduced high production cattle New water pumps Free education for girls to university Free education for all in primary grades

What is done todayVillagers agree to work together

Experts provide advice and support

Water conservationTrees planted on ridges (survival up: from 5% to 95%) Grazing stopped

Tree spp selected by villagers

Water conservationDams

Bunds

Terraces

5 Cents/day

New house

Old House

Fuel

Biogas generation

Milk production

Example: Kalamkarwadi:

Before: 705 litres

Today: 1969 litres

AgricultureE.g. Kalamkarwadi

Summer: 19%

Winter: 10%

Vegs: 0 ha to 23 ha

Sorghum

Wheat

Agriculture

Drip irrigationSweet lime

Castor

Income

One shed to brick house with biogas & store

EducationEqual number of boys and girls in school (Grade 1-4)

Social change

Micro loans

Self-help groups

Water

Drinking water all year round

Dry season crops

Discussion Use the elements of game theory to:

Identify the players in the central India case Describe the dominant strategy that led to the

problem Can you think of other solutions to the

problem(s)?