Opportunistic behavior

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In game theory, opportunistic behavior is used to describe behavior that maximizes individual benefits. Person A inspires trust in person B, so that B cooperates. A then tries to maximize its utility through a non-cooperative strategy (e.g. fraud or betrayal).

Economic basis

In the general economic sense, Oliver E. Williamson coined the term opportunistic behavior. The non-cooperative opportunistic behavior in game theory comes very close to the opportunistic behavior in Williamson's transaction cost theory . The economic actors act in accordance with their interests and try to maximize their utility through cunning and cunning. The opportunist appears as a benefit- maximizing homo oeconomicus , who prefers the short-term benefit of a one-time fraud to the long-term benefit of a permanent customer relationship.

Depiction of opportunistic behavior

Payoff Matrix in the Prisoner's Dilemma

The basis of decision-making in a game is the benefit that is achieved with an action. In transaction cost theory, lost benefits can be interpreted as opportunity costs . A two-person game in which each player has two alternative courses of action (good behavior in the sense of cooperation and defect in the sense of non-cooperation) is suitable for reconstructing the emergence of trust, which is based on opportunistic behavior . Good behavior means that a player behaves in such a way that the benefit of both players, i.e. the gaming community, is maximized and the other player does not suffer any losses. The alternative action defection, on the other hand, is directed against the gaming community and harms the other player. Due to the fact that the actions are carried out simultaneously and interdependently , both actors are trust-givers and trust-recipients at the same time. The results of the game are displayed in a payout matrix that records the benefits of the players depending on their own and the opponent's moves. It is assumed that the player's payout matrix is ​​known. There is trust when a player expects good behavior from the partner.

A cooperation dispenses with the establishment of a long-term control and sanction system . It should therefore initially be assumed that there is no direct sanctioning of wrong behavior. The creation of trust is therefore closely related to preventing the situation of the prisoner's dilemma .

In the situation shown here, the prospect of gaining an unpunished opportunity ("temptation to defect" [T]) encourages the players to defeat, because T is greater than the benefits of mutual cooperation ("reward for mutual cooperation" [R]) ). T can only be achieved, however, if the other player expects cooperation, i.e. trusts, and behaves cooperatively on his part. In this way, however, the other player only achieves a small or negative benefit ("sucker's pay off" [S]) and is thus the victim in good faith. If both players fail, both will receive a penalty P (“punishment for mutual defection”) as a result. This is probably small, but larger than S.

For players 1 and 2, the following preference structures result :


Player 1 : T1> R1> P1> S1


Player 2 : T2> R2> P2> S2


[T = temptation to defect (temptation to defect); R = reward for mutual cooperation ; P = punishment for mutual defection ; S = sucker's pay off (payment for unilateral cooperation)]

where it is assumed that S1 + T2 <R1 + R2 and S2 + T1 <R2 + R1

Motifs

As a result, opportunistic behavior in the prisoner's dilemma is the dominant strategy for two reasons . On the one hand, opportunity gains can be achieved and thus the achievement of the first preference (T> R). On the other hand, every player will expect opportunistic actions from the opponent and in this case choose the better alternative (P> S). It is always better to act opportunistically based on a player's point of view. If both players act according to this logic, both get P, i.e. a worse result than R if both sides cooperate. The individual maximization of benefits therefore leads to a worse result than necessary.

Disadvantage

The creation of trust, and thus the use of cooperation, is not possible under the conditions described. The situation was conducted on the assumption that no punishment would be used during the game. In reality, mechanisms are used to counteract the goal of personal gain. In game theory there is a penalty for this. Often the fear of consequences alone drives the homo oeconomicus to cooperate.

Furthermore, the use of opportunistic behavior is not worthwhile in the long term, because the reward for short-term opportunism is offset by the long-term opportunity costs of lost benefits.

example

The financial crisis from 2007 onwards also showed opportunistic behavior . One example is the credit default swaps , which were mostly sold by banks as so-called credit derivatives . These are similar to insurance policies that are used against the failure of a loan instrument. The seller of a credit default swap offers the buyer that he will step in if a borrower no longer meets his obligations. Bank employees and finance brokers received higher commissions for the sale of credit default swaps, depending on their turnover. With the personal intention of increasing commissions, they sought to sell these credit derivatives regardless of the risk that the buyers of the papers might face. Since August 2007, the risk for credit default swap holders has increased significantly. The benefit-maximizing behavior of the financial brokers and bank employees can clearly be described as opportunistic behavior.

supporting documents

  1. ↑ Cf. Hans-Bernd Schäfer: Textbook of the economic analysis of civil law (Chapter 6: The danger of opportunism), p. 511.
  2. ↑ Cf. Hans-Bernd Schäfer: Textbook of the economic analysis of civil law (Chapter 6: The danger of opportunism), p. 511.
  3. ↑ Oliver E. Williamson : Markets and Hierarchies: Analysis and Antitrust Implications, p. 26.
  4. ↑ Cf. Björn Saggau: Organization of electronic procurement (fundamentals of transaction costs), p. 106.
  5. ↑ Cf. Björn Saggau: Organization of electronic procurement (fundamentals of transaction costs), p. 106.
  6. ↑ Cf. Robert Axelrod : The Evolution of Cooperation, p. 7.
  7. ↑ Cf. Robert Axelrod : The Evolution of Cooperation, p. 7.
  8. ↑ Cf. Robert Axelrod : The Evolution of Cooperation, p. 7.
  9. ↑ Cf. Björn Saggau: Organization of electronic procurement (fundamentals of transaction costs), p. 107.
  10. ↑ Cf. Robert Axelrod : The Evolution of Cooperation, p. 7.
  11. ↑ Cf. Björn Saggau: Organization of electronic procurement (fundamentals of transaction costs), p. 108.
  12. ↑ See Heike Buchter: The Gift of Speculators, in: "Zeit Online" [1] (accessed: January 15, 2009, 1:11 pm CET).

literature

  • Avinash K. Dixit, Barry J. Nalebuff: Game Theory for Beginners. Strategic know-how for winners . Schaeffer-Poeschel Verlag, Stuttgart 1997, ISBN 3-7910-1239-8 .
  • Björn Saggau: Organization of electronic procurement (transaction cost theory basics) . German Universitäts-Verlag, Wiesbaden 2007, ISBN 978-3-8350-0818-2 .
  • Hans-Bernd Schäfer: Textbook of the economic analysis of civil law (Chapter 6: The danger of opportunism) . 4th edition. Springer-Verlag, Berlin 2005, ISBN 3-540-22805-5 .
  • Julian Steiff: Opportunism in Franchise Systems . German Universitäts-Verlag, Wiesbaden 2004, ISBN 3-8244-8177-4 .
  • Oliver E. Williamson: Markets and Hierarchies: Analysis and Antitrust Implications: a study in the economics of internal organization . The Free Press, New York 1975, ISBN 0-02-935360-2 .
  • Robert M. Axelrod: The Evolution of Cooperation .6. Edition. Oldenbourg-Verlag, Munich 2005, ISBN 3-486-53996-5 .
  • Zeit Online: Finanzmarkt URL http://www.zeit.de/2008/26/Finanzkrise (accessed on January 15, 2009).