It has been noted that introducing incentives to encourage specific behavior towards a particular outcome in institutions, individual organizations, or organizations can result in unintended consequences. The mathematical model of strategic game theory helps to predict outcomes in such situations as presented by Trun Sabarwal, the De-Min & Chin-Sha Wu Associate Professor and associate chair of economics at the University of Kansas.
According to Sabarwal, he studies decentralized and interdependent decisions and their collective impact when everyone behaves in that particular manner. In some recent papers, Sabarwal studied important classes of behaviors with strategic complements and substitutes.
In games with strategic complements, people have incentives to move in the same direction as others. For instance, if more depositors are going to the bank and withdrawing their money, it is in the best interest of the remaining people to withdraw their money before cash runs out of the bank. Also if more people are using Facebook or Twitter, other users will more likely use these platforms since their marginal benefit from doing so goes up.
In the other end of the spectrum, participants could have incentives to move in a direction opposite from others. These games have a strategic substitute. If many individuals are commuting on the road in the same direction, there would be an overcrowding effect. It is in the best interest of other commuters to move away from that direction, e.g., by using a different road.
Sabarwal said that there are many situations where interaction among decisions of participants could be modeled naturally as strategic complements or strategic substitutes. There are given conditions where both substitutes and complements like police seeking to foresee the movements of criminal suspects moving in the opposite direction to avoid capture. Another example is when a goalkeeper is trying to move in the same direction as a penalty shot and the t seeking to shoot in the opposite direction.
Reference
https://www.google.com/amp/s/phys.org/news/2019-01-economists-game-theory-outcomes-incentives.amp
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