A Prisoner’s Dilemma: The United States and China Must Take Responsibility for Reducing Environmental Pollution

The Prisoner’s Dilemma is defined as a situation in which individuals or entities (who usually act and/or make decisions in ways that are rational) fail to behave or make decisions in a way that is mutually beneficial for all parties involved. Even when it is best for the individuals or entities to work together, they still fail to behave or make decisions in a way that is mutually beneficial for all parties involved. In other words, by failing to cooperate, both sides miss out on achieving maximum benefit from the transaction[i] [ii] [iii] [iv] One example of such a situation is that of the United States’ and China’s reluctance to take responsibility for reducing environmental pollution to stave off effects of climate change. It is ideal for both countries to both agree to reduce environmental pollution.[v] [vi] [vii] However, such activity may not satisfy the tenets of a Nash equilibrium, which is defined as the point at which neither entity is motivated to act differently.[viii]

Image: Samson is entombed. Engraving by J.B. de Poilly after F. Verdier, 1698. Credit: Wellcome Collection. CC BY

A Nash equilibrium exists (Option “D”) when neither the United States nor China has an incentive to make a change (both used dominant strategy) because another country has opted to reduce emissions, instead. A Nash equilibrium fails to exist (Option “A”) when both the United States and China have to make concessions to reduce pollution (neither used dominant strategy). If China reduces pollution and the United States does not, then it is suboptimal for China (because China had to make concessions to reduce pollution) (Option “C”). If the United States reduces pollution and China does not, then is suboptimal to the United States (because the United States had to make concessions to reduce pollution) (Option “B”).[ix] [x] The Prisoner’s Dilemma is not completely resolved because regardless of actions taken, further reductions on the part of one or both countries may still be needed for the sake of protecting the environment.

References:

[i] Lecture Notes. Core III: Politics and Policymaking. “Game Theory, Coordination problems, credible commitment.” 01-02-2016. University of Oxford. Blavatnik School of Government. Hilary Term. 2016.

[ii] Dixit, AK and Nebuff. “Chapter 4: Thinking Strategically. The competitive Edge in business, politics, and everyday life.” 1991

[iii] “Prisoner’s dilemma and the environment.” https://blogs.cornell.edu/info2040/2012/09/24/prisoners-dilemma-and-the-environment/.

[iv] Robinson, Matthew. “Are people naturally inclined to cooperate or be selfish?” Scientific American. http://www.scientificamerican.com/article/are-people-naturally-inclined-to-cooperate-or-be-selfish/. 01 September 2014.

[v] Gronewold, Nathanial. “Game Theory: Climate Talks Destined to Fail.” http://www.scientificamerican.com/article/game-theorist-predicts-failure-at-climate-talks/. Scientific American. 20 December 2010.

[vi] Earl Saxon and Lisa Schenck. “The U.S. can escape the climate change prisoner’s dilemma.” The Hill. 10 November 2010. http://thehill.com/blogs/congress-blog/energy-a-environment/128637-the-us-can-escape-the-climate-change-prisoners-dilemma.

[vii] “Prisoner’s dilemma and the environment.” https://blogs.cornell.edu/info2040/2012/09/24/prisoners-dilemma-and-the-environment/.

[viii] Lecture Notes. Core III: Politics and Policymaking. “Game Theory, Coordination problems, credible commitment.” 01-02-2016. University of Oxford. Blavatnik School of Government. Hilary Term. 2016.

[ix] Dixit, AK and Nebuff. “Chapter 4: Thinking Strategically. The competitive Edge in business, politics, and everyday life.” 1991.

[x] “Prisoner’s dilemma and the environment.” https://blogs.cornell.edu/info2040/2012/09/24/prisoners-dilemma-and-the-environment/.