Hello! I am Vivi, and I want to discuss how I used Game Theory to approach the very pressing issue of the consequences of climate change. The video below introduces my connection to this topic as well as some basic tenets of Game Theory:
Summary of the Problem
I would like to study Miami Dade County’s sea level rise mitigation and adaptation plans in order to find the most effective as well as financially feasible plan. With the research I have done so far, I believe that I will be assigning and comparing payoffs of the following approaches to the crisis: reinforcing current buildings with better flood/hurricane defense, building new infrastructure like pump stations or houses on stilts, and implementing nature-based solutions like beach re-nourishment and dune restoration. I will then attempt to figure out which approach Miami Dade County should use in order to help its citizens and wildlife/nature deal with sea level rise.
Game Theory Matrix and Payoffs
Players and Choices:
I decided that the two players in my game would be Miami Dade’s city council that makes decisions on what projects to move forward with and the citizens of Miami Dade County. These would be good players because they receive payoffs based on how much sea level rise and its mitigation efforts affect their lives. Based on past reports and recent articles, I gave the city council two options for actions they can take. They can either create legislation to stop people from building/buying real estate on the shore or they can build new infrastructure to help streets and houses get prepared for sea level rise (like building stilts or raising roads). The citizens of Miami can choose to stay and pay taxes, or leave if they do not feel it is worth it to pay taxes for that project. The city council’s payoff will be based on how much funding they can get in each outcome, and the citizens’ payoff will be based on a combination of how good the outcome is at mitigating sea level rise and how much they had to pay in taxes. Below is the matrix:
The number on the left is the payoff for the city council, and the number on the right is the payoff for the citizens.
Explanation of payoff assignments:
– Outcome 1: In this scenario, the city council decides to take action by creating legislation to prevent building any new structures on the shore, and the citizens of Miami decide to stay, pay the taxes to fund this endeavor, and abide by the rules. The payoff for the city council would be 100 in this scenario because they would get tax money, and since citizens will abide by their rules, the strategy would be effective in saving further houses and structures from being in danger. Citizens would have a negative payoff of -50 because they have to lose money to taxes and also may have to move or abandon real estate projects. They will be disappointed and not enjoy the sea level rise mitigation.
– Outcome 2: In this scenario, the city council decides to take action by creating legislation to prevent building any new structures on the shore, and the citizens of Miami decide to leave because they do not want to abide by these rules or pay to put them into place. Since the citizens leave, the city council will not have as much money to move their plan forward and whatever mitigation efforts they succeed in will be negated by the debt they accrue by putting them into action, so their payoff is 0. The citizens have time to leave before paying taxes and get to invest money in real estate in other places, so they get a payoff of 50.
– Outcome 3: In this scenario, the city council decides to take action by making plans to build new infrastructure on houses and roads that will help them deal with sea level rise, and the citizens of Miami decide to stay and pay the taxes to fund this endeavor. This endeavor seems like it will cost more money for the city council, so even though it may be just as effective at mitigating the payoff will be slightly less than outcome 1 at 75 for city council. In this scenario, citizens will likely pay the same amount of taxes as scenario 1, but they do not lose their houses or investments, and instead get to see their roads and buildings get better at handling floods. Citizens get a positive payoff of 25.
– Outcome 4: In this scenario, the city council decides to take action by making plans to build new infrastructure on houses and roads that will help them deal with sea level rise, and the citizens of Miami decide to leave because they do not want to pay taxes to fund this endeavor. The city council gets a payoff of -25 because this is an expensive endeavor that they will have to go into debt to achieve since less people will be paying for it. Also less people will be enjoying the benefits of the mitigation effort. Citizens get a payoff of 25 because they leave before taxes go up and likely go somewhere where the sea level rise is not as bad.
Solution to the game
Below is the solution to this matrix. I solved it using the movement diagram method which shows arrows that point to the outcome with the highest payoff for a player given their opponent chose a specific move. The solution Nash equilibrium of the game, or the optimal outcome of a game is where there is no incentive to deviate from the initial strategy, is circled.
Conclusion and What to Do For Now
The solution shows that to achieve Nash equilibrium and the optimal outcome where neither player could choose a different strategy to earn a better payoff city council should enact a plan to stop construction close to shore, and citizens who do not like the should leave to avoid paying taxes. Of course, this model is a very idealed version of the actual scenario, and does not take into account things like the number of people who would leave and the different degrees of legislation city council would make. I think, though, that this model gives us a good sense that governments should just start taking any steps they can to help mitigate sea level rise effects because any plans will cost money. Also, in the long run, fixing the damages after the fact will cost more than paying for preventative measures. As a young student, I can personally email my representatives to push them into putting climate change discussion onto their agenda, and I can also take steps into my personal life to do less harm to the environment.
Please answer any of the following questions below or let me know if you have had any personal experiences with the effects of climate change/global warming.
– Do you have any knowledge about city councils or people moving habits that would make you assign payoffs differently?
– If you didn’t know how to find a solution using Game Theory,what actions would you think the government should take?
– Do you think governments should focus more on mitigating the effects of climate change or more on preventing climate change from getting worse?
Click here for the Works Cited page.
Thank you for your time and attention!