Question

1. What is an assurance game? Which mechanism can players introduce to achieve a cooperative outcome?

2. Why does the principle of international cooperation based on home country control pro-mote international regulatory harmonization?

Answer 1

1. Assurance game more generally known as the Stag hunt game is a game which builds a relation between social cooperation and safety. One very famous stag hunt game was proposed by jean Jacques in which two hunters can join a stag or can individually hunt the animal.

Now, talking about the outcome of cooperation in such a game, it is not very difficult. Prisoner’s dilemma was considered to be the best when it comes to the cooperative outcome. But assurance game too can deliver cooperative outcomes. To do so, players can pre analyse the whole game in order to achieve the best for all. They should check the payoffs and their Pareto outcome so that no one gets in losses by going individually. This can really help the players to achieve the best.