A Game-Theoretical Approach to Boycott Modelling
Quantitative impacts of boycotts by cooperative game theory
J.C. de Munnik (TU Delft - Electrical Engineering, Mathematics and Computer Science)
Robbert Fokkink – Mentor (TU Delft - Applied Probability)
Domenico Lahaye – Graduation committee member (TU Delft - Mathematical Physics)
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Abstract
Almost everyone is familiar with games such as poker and checkers, but games can also be found in non-entertaining settings, such as competing companies in a market or conflict resolutions between countries. However, what happens when players want to avoid working together? This thesis provides two game-theoretical models of boycotts based on existing literature and is complemented with new insights. We discuss the dynamic process of a consumer boycott, where the effectiveness can be determined by the predefined consumers’ and firm’s thresholds or by the maximum boycott duration. Besides, we consider a static model using the Shapley value to analyze the impacts of boycotts, which are balanced for 2-player boycotts but not when three players are involved. We extended the existing models by finding supermodularity as a sufficient requirement for the boycott to never be profitable for the involved players, by introducing a direct formula for the coalition value in a boycott game (the boycott-contraction), and by analyzing real-world data, where we observe the effect of boycotts on trading activities with uninvolved players.