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The Economics Theory Game

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These rules assert that the distribution of the coins must be proposed by the pirate who is the most senior. The pirates, with the inclusion of the proposer, then cast votes to decide on whether to accept the proposed distribution. If in the votes that are cast, 50% of the voters agree with the proposal, the gold coins are divided as the proposal was made. If after the votes there is a tie, the pirate who proposed the distribution has the casting vote (Hoena &amp. Stevenson, 2013, p 45-48).

If the pirates accept the distribution proposal, the disbursement of the coins takes place, and here the game ends. If the distribution proposal is not accepted, the pirate who had made the proposal is thrown overboard by the other pirates off their ship and dies. Once he is thrown, the pirate who is next most senior takes over the task of making a distribution proposal and begins the system again. The decisions of the pirates are deeply founded on three aspects. The first aspect is that all pirates seek to survive despite the proposal. The second aspect is, given that they survive, each pirate is extremely greedy, and each has the goal to get the maximum number of gold coins he will receive. The third and the last aspect is that, if all other outcomes are otherwise equal, every pirate will prefer throwing one another overboard. The problem is making the decision is that the pirates do not have trust in each other, and they will neither opt to make nor honor any promises that are made by the pirates unless it is the main proposal (Li, 2014). The big question now lies on, what could be the proposal of the pirate who is most senior? The assumption is that they put the three aspects in much consideration in the sense that they are extremely greedy and very intelligent and that there is no pirate who prefers to die.

The solution to the game
First, it is essential to gain a clear understanding of what 50% of the votes mean. It implies that for the distribution proposal to be adopted, it must get the votes of three pirates since there is a total of five pirates for it to pass.