Solved previous year question from the OPSC OAS/OCS 2021 Preliminary Examination (General Studies), with the official answer key and a detailed explanation.
Question
Consider the following statements in respect of Game Theory of Policy Evaluation:
The basic concepts of Game Theory model are
(i) Players in a game can be people, governments or institutions.
(ii) Strategies are selected by players without anticipating the moves of other players.
(iii) Players have different preferences among the possible outcomes.
(iv) Payoffs are often used to represent the value of these outcomes to different players.
Which of the above statement/s is /are correct?
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Answer & Explanation
Correct answer: (A) (i), (iii) and (iv)
Game Theory is a mathematical and strategic decision-making framework used in policy evaluation to analyse situations where multiple actors interact and their outcomes depend on each other’s choices.
(i)Players in a game can be people, governments or institutions.- Correct
- Any decision-making entity that participates in a strategic interaction can be considered a player. In policy evaluation, players typically include government agencies, political parties, interest groups, nations, or individual decision-makers.
(ii)Strategies are selected by players without anticipating the moves of other players.-Incorrect
- One of the core features of Game Theory is that players select their strategies by anticipating the moves of other players, not without anticipating them. The entire essence of Game Theory lies in strategic interdependence — each player considers what the other players might do before choosing their own strategy.
(iii)Players have different preferences among the possible outcomes-Correct
- Players do have different preferences among possible outcomes. Each player evaluates the various possible results of the game differently based on their own interests, goals, and values. These differing preferences are what create strategic tension and make the game meaningful.
(iv)Payoffs are often used to represent the value of these outcomes to different players- Correct
- Payoffs are a fundamental concept in Game Theory, used to represent the value of outcomes to different players. They quantify how desirable each possible outcome is for each player, typically represented in a payoff matrix. Payoffs can be expressed in terms of utility, money, political advantage, or any other measure of value.
