Global Profits, Local Decisions: Why Global Cooperation Falters in Multi-level Games

Global cooperation often falters despite shared objectives, as misaligned interests and unequal incentives undermine collective efforts, such as those in international climate change collaborations. To tackle this issue, this paper introduces a multi-level game-theoretic model to analyze the dynamics of complex interactions within hierarchical systems. The model consists of global, local, and pairwise games, and two strategy types, binary and level-based strategies, are explored under varying parameter conditions. Using computational simulations and numerical analysis, we examine how factors across different levels influence player decisions, game dynamics and population phase transitions during the evolutionary process. Our findings reveal that although the increase of profit rates at local and pairwise games enhances cooperation within the population, the global game exerts minimal influence on player decisions and population states under both strategy settings. Particularly, analytical and simulation results show that, under binary strategies, global profit does not influence localized decision-making of players, while under level-based strategies, players cooperating at the global level are eventually outcompeted due to the evolutionary disadvantage even when global profit is substantial. These insights contribute to a theoretical understanding of cooperation dynamics in multi-level systems and may offer implications for fostering global collaboration on challenges like climate change.