 In continuing on with our discussion on Evolutionary Game Theory, in this video we'll discuss Network Games. The workings of evolution are typically told as a story of competition and the classical conception of the survival of the fittest. But in reality, evolution is as much about cooperation as competition. A unicellular organism may have survived the course of history largely based upon its capacity to fight for resources with other unicellular organisms and its struggle with its environment. But the cells in a multicellular organism have survived based upon their capacity for cooperation. They form part of large systems of coordination and they are selected for based upon their capacity to interoperate with other elements within large networks that contribute to the workings of the whole organism. Likewise, in a ghetto full of gangsters, it might be your capacity to look out for your own skin that will enable you to get ahead. But at the other end of town where people earn their living as part of large complex organizations, it is primarily their capacity to interoperate with others and form part of these large organizations that determines their payoff in the end. You form part of a large cooperative organization which is really what is supporting you and determining your payoff. In such an event, one needs to be able to interoperate with others effectively, to be of value to the organization and thus succeed in the overall game. The idea is that evolution creates networks of cooperation which are able to intercept resources more effectively because of the coordinated effort. People's capacity to survive within such systems is then based upon their capacity for cooperation instead of competition as it might be if they were outside of these networks of cooperation in the jungle so to speak. Thus what we do are choices of strategy and the payoff for cooperation or defection in the real world depends hugely on the context outside of the immediate game and this context can be understood as a network of agents interacting. When we form part of networks of coordination and cooperation, our payoffs come to depend largely on what others around us are doing. I want to buy a certain computer operating system but the payoff of doing that will depend on what operating system my colleagues are using or people want to learn a new language only if the other people around them also speak that language. Thus the payoffs to the game are being determined by the network of connections. A key factor in the evolution of cooperation is spatial distribution. If you can get cooperators to cluster together in a social space, cooperation can evolve. In research conducted by Chris Stackers and Fowler, they have shown that our experience of the world depends greatly on where we find ourselves within the social networks around us. Particular studies have found that networks influence a surprising variety of lifestyle and health factors such as how prone you are to obesity, smoking cessation and even happiness. The experiment they conducted took place in Tanzania with the Hadza people, one of the last remaining populations of hunter-gatherers on the planet whose lifestyle predates even the invention of agriculture. They designed experiments to measure the social ties and social cooperation within the communities. To identify the social networks existing within the communities, they first asked adults to identify individuals they would prefer to live with within their next encampment. Secondly, they gave each adult three straws containing honey and were told that they could give these straws as a gift to anyone in their camp. This generated 1,263 camp-made ties and 426 gift ties. In a separate activity, the researchers measured levels of cooperation by giving the Hadza additional honey straws that they could either keep for themselves or donate to the group. When the networks were mapped and analyzed, the researchers found that cooperators and non-corporators formed distinct clusters within the overall network. When they looked at the individual traits with the ties that they formed, they found clearly that cooperators clustered together, becoming friends with other cooperators. The study's findings describe elements of social network structures that may have been present early in human history, suggesting how our ancestors may have formed ties with both kin and non-kin based on shared attributes, importantly including the tendency for cooperation. And according to this paper, social networks likely contributed to the evolution of cooperation. The emerging combination of network theory and game theory offers us an approach to looking at such situations. The idea is that there are different individuals making choices and they're on a network where people care about the actions of their neighbors. As an example, we can think of an individual, Kate, choosing whether to go to university or not, and this action will depend upon how many of her friends are choosing to go to university also. So the payoff for the individual will depend on how much she likes the idea of going to university as an individual, but also how many of her friends choose to go and how many friends she has. So in this network game, the individual might have a threshold. Say Kate will only go to university if at least two of her friends are also going, and we assume her friends also have the same threshold. This is an example of what's called a strategic compliments game, meaning that the more of one's neighbors that take an action, the more attractive it becomes for one to also take that action. But we can also have the inverse, what we call games of strategic substitution, where the more of one's neighbors that take the action, the less attractive it is for you. As an example, we might take Billy, who is thinking of buying a car, but Billy is also part of a social network of friends, and if one of his friends has a car, then he can take rides with the friend and has no great need to purchase a car. If we assume the same is true for his friends, we could use a social network model of the game to find where the equilibrium state is. So the payoff for Billy would look like a ranking where one of his friends having a car is best, then him having to buy one is second best, and then worst of all, no one having a car. An agent is only willing to take action one if no one else they're connected to is also taking that action. So in the network, we can see that it is an equilibrium because all the players connected to a player taking strategy one do not take that strategy. Our world is a complex place, especially when dealing with social interaction, where people are embedded within a given social, cultural, economic and physical environment, all of which is affecting the choices they make. The combination of network theory and game theory takes us into this world of complex games, which is much more representative of many real world situations, but still very much at the forefront of contemporary research. This video has hopefully given you a sense of how network game theory can help us to look outside the box of standard games, to see how other factors in the environment may be influencing the games and how to potentially incorporate these other factors through the application of network modelling.