Harvest game

In the previous class, a game called “the Harvest Game” was played. In this game, the class was divided into 6 groups of students. Every group represented a boat on a fictive ocean, containing 50 fish. Each boat was fishing in this ocean, trying to maximize its profits. The element of time in this game was represented by a ‘round’ where every team had to determine how much they were going to fish, not knowing about the yields of other groups. Every round the remaining fish in the ocean could miraculously reproduce themselves on their own, restoring the number of fish in the ocean up to 50 maximum. Each round, the number of fish caught are randomly assigned to the boats, making it possible for a boat to have caught less than demanded or even have empty fishing nets, if the stock of fish is respectively approaching or reaching 0.

Interesting was to see how the boats would fish in absence of information on how the other boats were fishing and the stock of the fish in the ocean.

This is a good example of Game Theory on the Tragedy of the Commons, two important concepts in Economic Science (which is part of my BSc degree). The behaviour of actors is analysed according to some assumptions: the actor choses to behave a certain way that is, to them, at least equal beneficial compared to the alternatives (Varian, 1987). When property rights of a good are not clearly defined, shared among a large number of actors or no harvest information is shared between actors, the emerging behavioural trend is not in favour of a sustainable use in time of the common good (is  I define a non-sustainable use of a common good as a yield that results in complete exploitation of the good, so nothing is left after some time)  (Varian, 1987). In cases like this, users tend to maximize profits on the short term, leaving nothing of the good for exploitation on the long term. This because the uncertainty of the behaviour of other actors, that information is not shared among users, and no strong incentive to prevent cheating (like a fine above the profit of cheating), it is tempting to ‘cheat’ one round and fish more than the sustainable yield would allow, in this case 25/6 = 4.17 fish each round. This would result in a higher profit for the boat in the ‘cheating round’ and a lower stock of fish in the coming rounds.

The result of the game in class was a non-sustainable yield, because after the 5^th round, the ocean was completely empty.

Having this said, it is interesting to analyse how to prevent the boats from ‘cheating’, meaning an incentive for the boats not to exceed the sustainable yield of 4.17 fish each round.

One measure can be the openness of information about the catch of each boat every round. This will take away some of the uncertainty of the actors in this socio-economic system, because knowing other users are complying to the moral of not increasing a yield of 4.17 fish will pressure actors to behave the same.

But cheating can still be rewarding if the profits gained from cheating are higher on the short term than the punishment of cheating. So another measure has to prevent this from happening. The largest yield possible is 50 fish if the boat is requesting 50 fish and all the remaining fish, with a maximum of 50, “are assigned by the ocean” to that particular boat. To overcome this incentive, a financial punishment higher than the profit of 50 fish should be implemented. This has to be done by an overarching organisation that has the power to assign a fine to a boat, that has to be paid. In this case, the teams should create such a governmental body.

To conclude, common goods are sensitive to be exploited to a stock of 0 by individual actors. Two measures have been presented: one is to make information available about the behaviour of other actors and the remaining stock, leaving users subjective to the moral pressure not to increase their catch about the sustainable yield. The other measure is to create an overarching body that has the power to fine cheating actors.

References

Varian, H., 1987. Intermediate Microeconomics, a modern approach. New York & London: W. W. Norton & Company.