Why The World Might Fail? – Game Theory

The importance of the Catalyst Conference topic, Quality Education, is that without education, the world would fail. People have to be educated to become good engineers, doctors, scientists, etc… but they can’t become all that by themselves, they need good education. And, for teachers to offer that, they need a good salary. So, when teachers are happy with their paycheck, that’s when good education is offered, and that’s when the world can become a better place for everyone.

Education is the most powerful weapon which you can use to change the world.”

-Nelson Mandela

Education can be the most powerful weapon, but how can it be powerful when teachers are being payed a couple hundred a month. When students pay thousands of dollars for their education, why are teachers only offered a couple hundreds for their salaries. Some students in the U.S. don’t even make it through college. Only 54.8% of students in the U.S. graduate from universities.

Before going into game theory, here’s a video I created that explains solving game-theoretic problems:

The following matrix shows a game between two players. One of them is the school & students. The other is the teachers.

Why are these the assigned payoffs?

When a teacher receives a high salary, he/she will proceed to teach well. I’m talking from experience. I’ve been to three schools and at all three I’ve experienced a different level of education. At the one which I paid the least tuition and the teachers salary wasn’t high, I haven’t had much of a good education. At another school, where I payed a good-priced tuition and the teachers salary was well, I received a good education, but that education wasn’t going to help me achieve my dreams. At the last school I attended, I payed a high price for tuition and the teachers had excellent salaries and that school offered me the perfect education that helps me grow my skills in achieving all of the goals that I set to my mind.

If the school gives its teachers a good salaries, the teachers will benefit greatly and the students will benefit even more. However, if the school provides low salaries, the teachers will not benefit as much and nor will the students.

If the teachers refuse to teach with a good salary, they miss out on a good opportunity they were given. However, if they refuse to teach with worse salaries, they can find work elsewhere that can offer them better salaries. As for the students, they aren’t going to benefit as much when the teachers refuse to teach because the school will be looking for a substitute.

Each one of the students & school and teachers has different strategies to pick from:

S-A: Give Higher Salaries

S-B: Give Lower Salaries

T-A: Agree & Teach

T-B: Disagree & Refuse to Teach

Assigned Payoffs Explanation:

AA: Students are being benefited with a good education & teachers are happy with their salaries.

BA: Students have a decent education & teacher is having a hard time living with their salary.

AB: School can’t find teachers with the salary they’re giving, and teachers are not accepting good salaries.

BB: Schools can’t offer higher salaries so barely any teachers will come to teach.

Solutions for the game:

AA, (4,2), is both Nash Equilibrium and Pareto Optimal.

All arrows point to AA (4,2) which makes (4,2) Nash Equilibrium
The upper-most rightest-most point is (4,2) which makes AA Pareto Optimal as well

There is no mixed strategy solution (undefined answer)

This game can also be modeled in a sequence:

Sequential Game Model

Analysis Explanation

The analysis above shows what each person would get if they chose a certain strategy. The best strategy for both sides is AA (4,2) [The upper right corner]. When the school chooses strategy [A], it chooses to give the teachers a higher salary. When the teachers choose strategy [A], they choose to agree to teach with their given salary.

This is the best outcome for both sides since both are getting benefited greatly. The [4] represents the pay-off the students receive and the [2] represents the payoff the teachers receive. This is the highest amount of pay-offs that both can receive in this non-zero-sum game.

This is the best thing the school can do to give its students a good education. Another thing the school can try to do is open up a fund-raiser and collect money to improve the schools technology systems and thus improve the work ethic of students.

You can follow this link to a page that shows the importance of quality education:

Please continue to this page to complete a 5-minute survey:

Works Cited Page:

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  1. April 26, 2019 by Juliana.Shank

    Super interesting! I’ve never seen game theory in action before.

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