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Eric Cox
A typical cycle of the game plays out in a clockwise flow around the payoff matrix diagram. If the starting point is state IV and the environmental groups choose to mobilize around an issue, the game moves to state III, which is the best for the environmental groups. The automakers recognize that this is their worst state and switch to the active strategy. They defend themselves against the changes desired by the environmental groups, moving the game to state I. This brings the game to the natural equilibrium state, so neither side has any motivation to switch strategies if they operate rationally. However, as mentioned previously, one group may run out of the necessary resources to sustain the active strategy before a decision is made on a certain policy. If the environmental groups run out of resources, a more likely scenario, then the game shifts to state II. This is where automakers are most likely to achieve their policy goals. From there, both groups prefer to transition back to state IV. However, if the automakers switch to a passive strategy before the environmental groups do, which is a very rare scenario based on assumptions about resources and commitment, then the game moves back to state III (from state I). This would be a very irrational move on the part of the automakers because it worsens their situation and improves the situation of environmental groups. If there is relatively little opposition to the environmental groups, the auto groups will most likely achieve their policy goals. From there, the game returns to state IV. Typically, a game plays out in a clockwise direction, or more rarely, moving in a cycle through all states besides state II. The 2008-2009 Auto Bailout Amid economic decline, rising gas prices, and declining automobile sales, the Big Three automakers requested bailout funds from the federal government in 2008. Without these funds, General Motors and Chrysler were on a path to file bankruptcy. This would have resulted in shockwaves sent through the economy especially in regard to jobs, as over two million could be lost in one year (Cox 2008). Major concerns with the bailout centered on restructuring benefits plans of union autoworkers, limits on executive pay and perks, and forging a path toward sustainability (MSNBC 2008). Environmental groups focused on this final concern and sought to tie bailout money to stricter fuel efficiency standards for cars (Cox 2008). Congress approved a fund of $25 billion for the troubled automakers and President Bush reduced the amount to $17.4 billion, to be administered by the incoming Obama administration (Neuman 2008). These bailout funds, were not enough to keep GM and Chrysler from filing for bankruptcy in 2009 with both companies planning to restructure (BBC News 2009).