Chicken game

 

Chicken game

The chicken game is a game in which two people rush as hard as they can to not back down first, and eventually both of them get hurt by bumping into each other.

It originated from an experiment devised by American psychologist Stanley Milgram in 1958. Milgram suggested the following games to the participants in the experiment.

The two cars run facing each other. The driver of one car should turn the steering wheel to the left, and the driver of the other car should turn the steering wheel to the right. A driver who turns left gets $100, and a driver who turns right gets $0. However, if both drivers turn the steering wheel to the left, they both collide and get hurt.

According to Milgram's experiment, most drivers thought the other person would turn the steering wheel first, and were reluctant to turn the steering wheel first. In the end, both drivers were often hurt by turning the steering wheel to the left.

It is a concept that can be applied in various fields such as business, politics, and diplomacy. For example, chicken games are examples of two companies lowering prices to increase their market share and eventually losing money, and two countries start a war while showing off their military power.

Chicken Game in Business

Price Competition in Semiconductor DRAM Market

From 2007 to 2009, Samsung Electronics and Hynix had a fierce price competition. The two companies lowered their prices to increase their market share, and eventually DRAM prices plunged. As a result, both Samsung Electronics and Hynix suffered heavy losses.

the airline industry's competition for fares

Recently, the competition for fares has been intensifying in the aviation industry due to the emergence of low-cost airlines. Low-cost airlines are increasing their market share by offering cheaper fares than traditional airlines. As a result, existing airlines have also started to lower fares, and in the end, fares are falling overall. As a result, profitability is deteriorating for the airline industry profitability.

a case of the chicken game in politics

an arms race during the Cold War

The United States and the Soviet Union fought an arms race during the Cold War. The two countries increased their military capabilities to overwhelm each other and ended up spending huge amounts of money. As a result, the two countries are financially burdened.

a military confrontation between the two Koreas

The two Koreas have continued to face military confrontation since the division. The two countries are developing and deploying weapons that can attack each other, and face the danger of war breaking out at any time.

Chicken Game Cases in Diplomacy

2019 U.S. Trade War with China

The United States began imposing trade sanctions on China in 2019. The U.S. has imposed tariffs on Chinese products, claiming that China is stealing technology and infringing intellectual property rights. China also imposed retaliatory tariffs on U.S. products, and the two countries entered a trade war. This has taken a toll on the economies of both countries.

Russia's invasion of Ukraine in 2022

Russia invaded Ukraine in 2022. Russia has invaded Ukraine, claiming that Ukraine's membership in NATO poses a threat to its security. Ukraine is fighting against Russia, backed by the United States and the European Union. Ukraine and Russia are suffering greatly from the war, and economic instability is growing around the world.