Governance as a strategy in state-of-nature games

Abstract

Public choice scholars routinely claim that coercion can be used to solve the social dilemma. However, while social contract theorists have frequently described state-of-nature societies using game theory, they have not used game theory to show how coercive action within such societies can improve outcomes. Here I operationalize the concepts of coercion and governance within a Prisoners' Dilemma (PD) framework; governance is operationalized as coercion to compliance, and to adopt a coercive strategy is to impose a strategy choice upon another player. I show that, under certain conditions, adding governance strategies to a noncoercive one-shot PD game can improve outcomes. © Springer Science+Business Media, LLC 2009.