Mitch and Phil Play Chicken

Claire and Cam want to flip a house, but Phil and Mitch are against it. Phil pretends he is for it leaving Mitch to put his foot down, but eventually Mitch decides to play the good cop as well and leave Phil to put the brakes on the house. If Phil and Mitch had agreed before hand to both be against the plan (cooperate), they could have come to the best outcome, but it was in Phil’s best interest to deviate and act like he supports Claire and Cam, leave Mitchel to take the full cost of the outcome. Mitchel then decides to defect as well and they are now both supporting a project they don’t believe in. This scene represents a more common version of prisoner’s dilemma in which both Phil and Mitchell would be better off cooperating, but they each have an incentive to defect.

See more: game theory, incentives, interdependent utility functions, prisoner’s dilemma, sequential moves

Mother Daughter Tattoos

It’s Haley’s 21st birthday. She and Claire have decided to get coordinating tattoos. Claire got hers first and now Haley is having a change of heart. In this scene, we see time inconsistency and imperfect information. Haley is concerned that her preferences will change over time so she decides against getting the tattoo. Meanwhile, Claire already regrets her tattoo because Haley won’t be getting one – but it’s too late for Claire. Tattoos do not have a return policy! If Claire had known that Haley would change her mind, she would not have gotten a tattoo (imperfect information). This clip can also be used to compare and contrast two types of games in game theory – sequential games and simultaneous games. If you decide to get a tattoo with a friend but only because you’re doing it with a friend, make sure you get them simultaneously!

See more: behavioral, game theory, imperfect competition, intrinsic rewards, preferences, sequential moves, tastes and preferences, time inconsistency

Everyone Confess!

When Claire and Phil cancel Christmas after finding what looks like a cigarette burn in the sofa, Alex suggests she and her siblings all confess so that their parents will reinstate Christmas and go easy on them for protecting their siblings. Unfortunately there is an incentive to cheat, but Luke isn’t smart enough and ends up confessing to something he didn’t do.

See more: cooperation, game theory, incentives, prisoner’s dilemma, sequential moves, simultaneous moves