Define: Chicken Game

The Chicken Game, also known as Chicken or Dare, is a classic game theory scenario that illustrates the concept of strategic interaction and risk-taking behaviour. In the Chicken Game, two players engage in a contest where each attempts to outdo the other by demonstrating their willingness to take greater risks. The objective of the game is to force the opponent to yield or “chicken out” first, thereby establishing dominance or superiority. The game gets its name from the idea that both players are essentially “chickens” unwilling to back down from a dangerous or risky situation. However, there is a dilemma: if neither player yields, they may both suffer severe consequences, such as a collision in a car race or mutually assured destruction in geopolitical conflicts. The Chicken Game is commonly used as a metaphor in various contexts, including politics, economics, and interpersonal relationships, to illustrate situations where parties engage in brinkmanship and high-stakes negotiations with potentially catastrophic outcomes.

A chicken game is a game theory setup that typically describes two players heading toward each other. If the players continue on the same path, they bump into each other; if one swerves out of the way and the other doesn’t, the swerver “loses” and is labeled the chicken, while the second, implicitly braver player, wins.

The payoff matrix is as follows:

Swerve Continue Straight
Swerve 0, 0 -1, +1
Continue Straight +1, -1 -2, -2

(This setup implies two players are merely walking towards each other; if they were, say, driving, the Continue Straight/Continue Straight choice would constitute a much higher negative payoff. While these differences in payoffs matter for calculating mixed strategy Nash equilibrium, only order matters for regular Nash equilibrium).

Analysis

The NE in this scenario are Continue Straight/Swerve and Swerve/Continue Straight.

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This glossary post was last updated: 29th March 2024.