Request: This is a writing task which means that papers which are not written at a native English writer level can not be accepted. In this assignment, you will apply the game theoretic concepts to help you understand a real-world situation of your choice. Pick some specific real-world situation you are interested in, such as the Persian Gulf War. The situation should be tied to politics or political science in some way, but since the primary goal is to apply game theory the connection can be loose. The situation can be a historical situation or it can be an ongoing situation, but should represent an actual situation, not a hypothetical or general situation. You may do something related to your first two application assignments, but it should not be the same exact situation. I.e. you should do a different aspect of the situation. You may also do a completely different situation. You will then develop an extensive form game that includes private information to represent this situation. This could be either a basic private information game (where the uninformed player moves first) or a signaling game (where the informed player moves first). When choosing a situation to analyze, consider whether it can be reasonably represented by such a game. If you have questions about whether a specific situation would work.
Then, answer the following questions:
- In 2-3 paragraphs (less than one page overall) summarize the event or situation. You will need to do some research for this section. Since this isn’t primarily a research paper, I will allow you to use Wikipedia as you wish. Make sure to cite your sources.
- Who are the critical actors in the situation? You may include more than two actors as appropriate, although you should be careful given the added complexity. Actors could be grouped as appropriate.
- What choices does each actor have? What is the private information? Who knows the private information? In what order do the players make their choices?
- Draw the basic game. For this assignment, the game needs to include private information. I.e. there must be different realities, where only player knows what reality they are in. The game may or may not include a signaling component.
- What is each actor’s preference over the possible outcomes? Back up your assessments with the research you did.
- Fill in the actors’ preferences into the game you drew.
- Solve the game. I.e. find all the perfect Bayesian equilibria to the game. It is OK if the solution to the game does not match the real-world outcome. If there are multiple equilibria, discuss whether some make more sense than others.
- In 1-2 paragraphs, discuss what the game tells us about the situation. If you chose a historical situation, include a discussion of whether the predictions of the game matched the outcome.
- In 1-2 paragraphs, evaluate the game you developed. How closely does it match the overall situation? Are the assumptions that you made reasonable? If you were to make 1 or 2 modifications to the game, what would they be? (you do not need to actually make these modifications).
- How do you think the game would change if you switched the order of the informed and uninformed player? How would the presence or absence of signaling dynamics likely change the game and outcome?
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