Disparate examples of game theory and the rational actor paradigm in action

Business World. Donald Trump and Vladimir Putin's Troublemakers
by: Holman W. Jenkins, Jr.
Nov 05, 2016
Click here to view the full article on WSJ.com

TOPICS: Economic Incentives

SUMMARY: The Kremlin has a stake in promoting email leaks that suggest America is as kleptocratic as Russia. This week's Business World column is about two incentive problems. First, "Dictators can be-but aren't necessarily-trapped into ever-increasing repression by fear of retribution over the means they used to gain power." Second, "The U.S. Army loads more checklist requirements on junior officers and their units than they can possibly comply with, leaving junior officers little choice but to become practiced at deciding which requirements to meet and which to lie about."

CLASSROOM APPLICATION: Students can evaluate the effect of pressures (i.e., incentives) that lead to unethical behavior, such as ever-increasing repression by dictators and lying and cheating by employees.

QUESTIONS: 
1. (Advanced) The column notes "tit-for-tat strategies." Describe these strategies. In games such as the prisoner's dilemma, how can the use of tit-for-tat strategies promote behavior that increases the payoffs of the players involved in the game?

2. (Introductory) What causes dictators to ever-increasingly repress their citizens?

3. (Advanced) Why does setting impossible standards for employees to meet result in unethical actions like lying and cheating by employees?

Reviewed By: James Dearden, Lehigh University