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The Hare Question in Assurance Games: Practical Problems and Insights From Robotic Surgery

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  • Roger Lee Mendoza

Abstract

We examine in this article a frequently overlooked, if not ignored, premise underlying the canonical assurance game model: Hunters could potentially bag more than a single hare (or two) in place of the prized stag. Whether a risk-dominant equilibrium is necessarily inefficient or inferior to one that is assumed to be payoff-dominant is the question we seek to address. In doing so, we suggest plausible variations of the model with different game-theoretic realizations. Single-play illustrations drawn from robotic surgery underscore their practical implications for health care economics and management. The robotic technology revolution amplifies the rational and interactive choices available to players under conditions of risk and uncertainty. Like the canonical model, our illustrations involve insulated, self-interested actions arising from the presence or absence of trust and coordination among players. They differ from the canonical model by allowing for multiple, potentially cooperative equilibrium payoffs. Any cooperative action can be considered optimal if players coordinated on it, taking fully into account the quantifiable and multiplicable value of their second best strategies. Nonetheless, we suggest that any dominant solution/s should accommodate best evidence in health care to provide patients with the most suitable treatments and services. There lies the challenge in reconciling theory and practice in health economics. JEL Classifications : C70, C71, I11, I12

Suggested Citation

  • Roger Lee Mendoza, 2018. "The Hare Question in Assurance Games: Practical Problems and Insights From Robotic Surgery," The American Economist, Sage Publications, vol. 63(1), pages 18-30, March.
    • Handle: RePEc:sae:amerec:v:63:y:2018:i:1:p:18-30
    DOI: 10.1177/0569434517711383
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    References listed on IDEAS

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    1. John C. Harsanyi & Reinhard Selten, 1988. "A General Theory of Equilibrium Selection in Games," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262582384, December.
    2. Golman, Russell & Page, Scott E., 2010. "Individual and cultural learning in stag hunt games with multiple actions," Journal of Economic Behavior & Organization, Elsevier, vol. 73(3), pages 359-376, March.
    3. Battalio, Raymond & Samuelson, Larry & Van Huyck, John, 2001. "Optimization Incentives and Coordination Failure in Laboratory Stag Hunt Games," Econometrica, Econometric Society, vol. 69(3), pages 749-764, May.
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    More about this item

    Keywords

    best evidence; cooperation; defection; equilibrium; optimal; payoffs; risks; strategic outcomes;
    All these keywords.

    JEL classification:

    • C70 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - General
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior

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