Chicken Game

Definition

The chicken game is a model of strategic decision-making in which two individuals or groups engage in a confrontational situation, each refusing to back down from a course of action that would lead to a catastrophic outcome for both parties. The name derives from the dare of two drivers steering their cars towards each other, with the first one to swerve being the 'chicken' who loses face.

5 Must Know Facts For Your Next Test

1. The chicken game is a type of non-zero-sum game, where the outcome can be a win-lose, lose-win, or lose-lose scenario.
2. In the chicken game, each player has a dominant strategy to not back down, even though this leads to a catastrophic outcome for both.
3. The chicken game is often used to model situations where two parties are engaged in a high-stakes confrontation, such as nuclear deterrence or political standoffs.
4. The Nash equilibrium in the chicken game is for both players to not back down, which results in a lose-lose outcome.
5. The chicken game highlights the importance of communication, trust, and the ability to commit to a course of action in resolving collective action problems.

Review Questions

• Explain how the chicken game models a collective action problem and the problem of incentives.
  • The chicken game is a classic example of a collective action problem, where the individual incentives of the players lead to an outcome that is worse for both parties. In the chicken game, each player has a dominant strategy to not back down, even though this results in a catastrophic lose-lose outcome. This highlights the problem of incentives, where the rational choice for each individual is to not cooperate, even though cooperation would lead to a better outcome for everyone involved. The chicken game demonstrates how the pursuit of individual self-interest can lead to suboptimal outcomes, and the importance of finding ways to align individual and collective incentives.
• Analyze the role of communication, trust, and commitment in resolving the chicken game.
  • In the chicken game, the ability to communicate, build trust, and commit to a course of action can be crucial in resolving the confrontation. If the players can establish open communication and a credible commitment to not back down, they may be able to avoid the catastrophic lose-lose outcome. However, this requires a level of trust and willingness to cooperate that may be difficult to achieve, especially in high-stakes, confrontational situations. The chicken game highlights the importance of developing mechanisms and institutions that can foster communication, build trust, and facilitate credible commitments, as these factors can be essential in resolving collective action problems and aligning individual and collective incentives.
• Evaluate how the chicken game can be applied to real-world situations, such as nuclear deterrence or political standoffs, and the implications for policy and decision-making.
  • The chicken game has been used to model a variety of real-world situations, such as nuclear deterrence and political standoffs, where two parties are engaged in a high-stakes confrontation. In these cases, the chicken game can help illustrate the challenges in aligning individual and collective incentives, and the potential for catastrophic outcomes if neither party is willing to back down. Policymakers and decision-makers must carefully consider the dynamics of the chicken game when dealing with such situations, and work to develop strategies that can foster communication, build trust, and facilitate credible commitments between the parties involved. This may require the creation of institutional mechanisms, such as international agreements or dispute resolution mechanisms, that can help manage the inherent tensions and incentive structures present in collective action problems. Ultimately, the insights from the chicken game can inform more effective and sustainable approaches to resolving complex, confrontational situations in the real world.

Related terms

Collective Action Problem: A situation in which individuals or groups fail to cooperate, even though cooperation would lead to a better outcome for everyone involved.

Dominant Strategy: A strategy that is the best choice for a player regardless of the choices made by the other player(s).

Nash Equilibrium: A situation in which each player is making the best decision for themselves given the decisions of the other players.