Canada’s power grid could have the potential to improve significantly, which would lead to benefits such as additional employment opportunities as well as decreasing carbon emission rates. In order to do so, Canada will need to work closely with the USA to construct an improved power grid. However, Canadian provinces are focusing on provincial utilities. This caused none of the Canadian provinces to want to initiate an agreement with each other and the USA to construct a new power grid.
The issue that is occurring is the tragedy of the commons, which is when individuals try make decisions that would benefit themselves the most but each individual making the best decision for themselves results in a worse overall position for all of the individuals. In this case, constructing a new power grid would cause the Canadian provinces to focus less on provincial utilities. This would mean that from their perspective, they would not be making the best decision to benefit themselves. However, if they agreed, the new power grid could potentially result in significantly more benefits to each of the provinces than the benefits that focusing on individual provincial utilities would provide.
This is an interesting application of game theory because it demonstrates a solution that could benefit both Canada and the USA but may not be directly noticeable if each province individually makes decisions that would benefit themselves the most. I chose to write about this application because it demonstrates the power of game theory as using game theory to assist in making decisions could potentially benefit entire countries. In addition, this application shows that the potential benefits of using game theory can be very significant, including benefits to the environment as well as economic benefits. From adopting a network science approach to the problem, it is possible to find a solution that could benefit both Canada and the USA that could have potentially been more difficult to identify without this approach.
Bibliography:
https://www.nationalobserver.com/2022/05/17/opinion/commons-holding-back-canada-power-grid
https://cmsweb.utsc.utoronto.ca/c46blog-f19/index.php/page/2/ (the blog post “Why you shouldn’t make rational decisions.” explained the concept of the tragedy of the commons well which helped me identify that the article is related to future course material)