Report 1 - Stag Theory

Team Voldemort

Intro
The Stag Hunt is a simple yet interesting game that explores the decision-making of two
hunters in whether they should individually hunt a hare or work together to hunt a stag.

Without consulting each other, both hunters have to decide whether they should save
time and snag the decent catch of a hare or if they want to risk hunting the stag. In order
to successfully get the stag, both hunters must take the risk, whereas each hunter
individually is capable of catching a hare. This game requires both hunters to trust each
other and work together to get the best outcome (the stag). If only one hunter goes after
the stag, they will have wasted time and will be left without a catch, while the other
hunter will end up with an okay catch of a hare.

The concept of weighing the risk of a high utility reward that you cannot guarantee on
your own versus playing it safe to guarantee a lower utility is applicable to many
situations in life. The Stag Hunt provides an important analogy for human interactions
by analyzing one’s choice to trust others and take a risk for a greater payoff or play it
safe and ensure a lower payoff.

Description
The strategic and extensive forms of Stag Hunt are shown below:

Stag Hunt models a situation where security and trust come into conflict. The (S, S)
strategy represents both players (whether they are hunters, co-investors, or countries
voting on international policy) choosing to cooperate, thus producing higher payoffs for
both parties. This is the ideal outcome. However, if one player chooses hare, and the
other one does not, (S,H) or (H,S), then the player who chose the hare will receive
higher utility than the person who chose to hunt the stag. The last strategy is (H,H),
where both players choose to act individually and are guaranteed smaller payoffs at
less of a risk to themselves.

If both players are able to trust each other, then they will both benefit more. But if
players value the security of their potential payoff more, then they will opt to act
individually. Players must ask themselves whether the risk associated with relying on
the other player is worth the potential reward. As Brian Skyrms writes in his paper about
the game, “what is rational for one player to choose depends on his beliefs about what
the other will choose” (Skyms, 3).

Formal Analysis

Formally, Stag Hunt is a game that has two pure Nash equilibria: one that is risk
dominant and one that is payoff dominant. Let’s examine the strategic form below, with
the pure Nash equilibria being circled in blue:

The payoff dominant Nash equilibrium is the upper-left, where both Green and Pink
decide to hunt the stag. The risk dominant Nash equilibrium is the lower-right, where
both Green and Pink decide to hunt a hare.

There is a mixed Nash equilibrium for this game – in the strategic form above, the mixed
Nash equilibrium is p = 0.5 for both Green and Pink (with p being the probability of
hunting a stag). You cannot obtain a mixed Nash equilibrium where p is greater than
0.5. While the mixed Nash equilibrium is mathematically interesting, it presents a
strategy that would never be played.
While this might initially seem like a Prisoner's Dilemma, the fact that the payoff
dominant option is also a Nash equilibrium means that it is slightly different and the
incentive graph is different accordingly. Instead of the one equilibrium we would be
expecting with a pure Prisoner’s Dilemma, we are instead left with three: two pure and
one mixed.

Empirical Results
One study examined the differences in coordination between pairs of 10 chimpanzees
and 40 four-year-old children in Stag Hunt games (Shona et al.). Participants were
trained and tested for games of low risk and high risk where risk was determined by the
value of the food reward for choosing hare. In both games, participants started out with
a hare box closed permanently if participants chose to abandon it. On the opposite side
of the room, once the participants had decided to attempt to collect the hare, the stag
box appeared and needed both partners to pull on its ropes to release the reward. If this
did not occur within 15 seconds then it was taken away. Additionally, a barrier was
placed between participants to limit visual cues unless both participants went for the
stag (done by adding a curtain between partners so actions were not observable) with
limited audio cues for the arrival and departure of the stag. During the experiment,
participants were observed based on their decision to leave the hare, coordination
success (if both chose to go for the stag), and verbal communication before and after
abandoning the hare.
While coordination was high in the low-risk trials, children had far superior results in the
high-risk trials. Chimpanzees were less likely to leave the hare in high-risk games
compared to low-risk games (69% vs. 94.3%) with lower success in coordination (53%
vs. 91%). Chimpanzees also did not communicate before leaving the hare, only once
they had already decided to go for the stag and with relatively low numbers (11.5% vs.
7.5%). By contrast, children left the hare 92.8% of the time (88.2% vs. 98.3%). They
also had high levels of coordination (84.7% vs. 96.7%). Furthermore, in high-risk games
children communicated more while at the hare (47.9% vs. 4.2%) and after leaving the
hare.
Overall, both chimpanzees and children were highly successful in low-risk situations
with minimal communication. But with high-risk situations, the differences were
apparent. Chimpanzees didn’t want to risk leaving the hare and also couldn’t
communicate well enough when they chose the stag. Their risk-averse nature combined
with a lack of communication (and success rate) made them fall far behind the children.
It seems that the children were able to lower the risk associated with leaving the hare
through communication and were therefore far more willing and successful at going
after the stag.
A different study focused more on how this game works for larger groups rather than
just one partner (Zhou). This study simply had groups of participants choose hare or
stag and varied how the participants acted with each other in between rounds. They
showed that regardless of whether a group knew each other or not, meaning if they had
interacted before, people are still more likely to choose the hare. However, this data
changed once a leader emerged. The leader was someone who stood out in the group
for not being allowed to switch strategies each round. Then, the group would tend to
choose whichever animal the leader was tending to choose. Besides a leader providing
influence over the choices, the formation of groups could also shift the data. This was
done by reinforcing the participants to talk to the same people again each round. Once
a group was formed that attempted to choose the stag, the group that attempted to
choose the hare saw how they could receive a higher benefit, so more of the hare group
converted to the stag group. Here we see that without any leadership or communication,
there is no trust among the group and everyone will act risk-averse to ensure their own
benefit (Skyrms).
Discussion
We’ve all heard many phrases akin to “two heads are better than one” or “there is no I in
team.” These sayings all argue that teamwork and cooperation is always the best
strategy. In the context of Stag Hunt, that means trusting and cooperating with the other
player (choosing to hunt the stag) is worth it. If we’ve been told that cooperation is
always good, then why would people choose to hunt hares?

Based on our analysis, the reason these sayings aren’t “do all the work on your own, it
is less risky” is because of the social dynamics that are present in real-life Stag Hunts.
In the formal setup of the game, players are not allowed to communicate with each
other. Without communication, there is no way of knowing what the other player will
pick, leaving each player to determine how much risk they want to take. We were
surprised to see that participants did not trust each other to obtain the higher payoff, but
instead chose to play it safe.

However, once social dynamics and the ability to communicate are added to the game,
the likelihood of cooperating for the higher payoff is increased. Players can develop
trust between one another through cheap talk, a credible leader, or from a group.
Wherever it comes from, communication and social dynamics make it easier to accept
the risk cooperation has, therefore making the higher payoff Nash equilibrium more
attainable. For example, if two hunters meet in a tavern to talk about potentially hunting
a stag together and they deem each other to be trustworthy, then hunting a stag doesn’t
seem to be as much of a risk.

In international relations, a Stag Hunt can be seen in disarmament negotiations

between countries. Both countries know that mutual disarmament is the most desirable
option: it costs money to maintain weapons, and if both parties are disarmed they are
assured of their safety. However, no country wants to take the risk of being unarmed
while the other is armed. Both countries' aversion to risk is what typically drives them
both to arm (Willner-Giwerc).

Stag Hunt is a relevant game in a variety of situations on both a societal and individual
level. Players must weigh the value of the higher payoff and their trust in the other
player with the risk of failure and lack of cooperation. With communication and trust, this
risk can become more tolerant for players.
 Works Cited
Duguid Shona, Wyman Emily, Bullinger Anke F., Herfurth-Majstorovic Katharina and
Tomasello Michael. 2014 Coordination strategies of chimpanzees and human
children in a Stag Hunt game. Proc. R. Soc. B. 28120141973. 20141973.
http://doi.org/10.1098/rspb.2014.1973
Skyrms, Brian. The Stag Hunt - University of California, Irvine. Mar. 2001,
https://www.socsci.uci.edu/~bskyrms/bio/papers/StagHunt.pdf.
Willner-Giwerc, Max. “Game Theory and Disarmament: Thinking beyond the Table.” E,
18 Dec. 2018,
https://www.e-ir.info/2018/12/18/game-theory-and-disarmament-thinking-beyond-t
he-table/.
Zhou, Karen. “The Stag Hunt Theory and the Formation Social of Contracts.” Course
Blog for INFO 2040/CS 2850/Econ 2040/SOC 2090, 21 Sept. 2015,
https://blogs.cornell.edu/info2040/2015/09/21/the-stag-hunt-theory-and-the-forma
tion-social-contracts/.