The Corona-Pandemic: A Game-Theoretic Perspective on Regional and Global Governance
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The Corona‑Pandemic: A Game‑Theoretic Perspective on Regional and Global Governance Alejandro Caparrós1 · Michael Finus2,3 Accepted: 11 July 2020 © The Author(s) 2020
Abstract We argue that the incentive structure of all individual and coordinated measures across countries to contain the corona-pandemic is that of a weakest-link public good game. We discuss a selection of theoretical and experimental key results of weakest-link games and interpret them in the light of the corona-pandemic. First, we highlight that experimental evidence does not support the assumption that coordination can be trivially solved, even among symmetric players. Second, we argue that for asymmetric countries the weakest-link game does not only pose a problem of coordination, but also a problem of cooperation. Third, we show how and under which conditions self-enforcing treaties can foster coordination and cooperation. We account for the possibility that countries make mistakes when choosing their actions. Our discussion shows that North–South cooperation is relevant and likely to be self-enforcing and that regional cooperation, e.g., within the EU, will also be important. Keywords Weakest-link game · Game theory · Experiments · COVID-19 · Coordination · Cooperation
1 Introduction The world is facing the worst pandemic in a century,1 caused by a new form of coronavirus.2 In a highly interconnected world, efforts to mitigate the effects of COVID-19 need to be coordinated, as an outbreak anywhere in the world puts all other countries at risk.3 That 1 Most likely, the last pandemic of similar proportion was the so-called Spanish-flu that emerged in 1918. The world was at war and intercontinental travelling was rare. 2 Although the severity of this pandemic might recede in the coming months, there exists a large number of similar viruses that might provoke new pandemics. Thus, the issues discussed here will remain relevant in the years to come. 3 See “At Least 89 Vaccines Are Being Developed. It May Not Matter”, New York Times, April 29, 2020.
* Michael Finus michael.finus@uni‑graz.at Alejandro Caparrós [email protected] 1
Institute for Public Goods and Policies, Spanish National Research Council (CSIC), 28037 Madrid, Spain
2
Department of Economics, University of Graz, Graz, Austria
3
Department of Economics, University of Bath, Bath, UK
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is, if one country relaxes its control measures and provokes an outbreak, all other countries will be negatively affected. The same logic applies to regions within a country, or states in the US. In addition, even wealthy and developed countries in Europe have seen that individual efforts may not suffice to control an outbreak. The situation will be even worse if serious outbreaks occur in developing countries or countries in transition, like currently observed for instance in Brazil and India. This implies that cooperation, and not only coordination, is needed to address this pandemic. Ideally, one would look at previous experienc
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