Stag Hunt

Per (Scotchmer) In Stag Hunt, there are two Nash equilibria; cooperation is payoff dominant (Pareto optimal), whilst non-cooperation is risk dominant. There is more risk involved when choosing the payoff dominant strategy as one could end with worst case payoff. Thus, the desirable coordination outcome is clear, but the coordination is risky. This game highlights people’s need for trust, and their risk and loss averse nature.

Examples:
- CountryA/B Committing/Not Committing to climate change action
- Country A/B focusing on short term costs of climate change action versus long term gains of climate change action.
- Classmate A/B cooperating (working together) or defecting (working alone).

Scotchmer, Liam. “Stag Hunt.” Polonomic Papers, 2025, polonomicpapers.com/stag-hunt.