We are all Prisoners: The Prisoner’s Dilemma
As we learn about Game Theory, one of the most important and famous concepts is the prisoner’s dilemma. The concept is fairly straightforward: there are two parties who each have the option to cooperate or to defect; if one side cooperates and the other side defects, the side that cooperated is punished severely and the side that defected is rewarded or set free; if both sides defect, both parties are punished; and if both sides cooperate, both sides are punished but at a minimal severity.
The Prisoner’s Dilemma is something that we all face in our lives whether or not we realize it. I found a great piece about real world applications of the prisoner’s dilemma that provide great insight into how it applies in business, war, litigation, love, movies and more through several short texts (all linked to from the index page).
http://www.spectacle.org/995/index.html
Throughout this piece, the author often uses the word ‘trust’ when describing the cooperation scenario. This is because when cooperating, one does not truly know the intentions of the other party. For example, in a business interaction, the seller is providing a product or a service and the buyer is providing payment. The buyer is trusting that the seller’s product works and is functional, while the seller is trusting that the buyer will complete the payment. Now considering this situation as a prisoner’s dilemma, the following scenarios play out. If the buyer makes the payment but the product does not work, then the seller gets all the benefit from the transaction and the reward while the buyer gets punished severely with a useless product, lost money, and the sucker’s payoff. If we flip the switch and the seller provides a working product but the buyer does not make the payment, then the seller gets punished severely with a lost product that he worked on and no money, while the buyer gets all the reward with a working product and keeps the money. Now if both parties cooperate, then each gets a small reward (seller gets money, buyer gets a working product) but arguably got less than if it had taken advantage of the other party. Lastly if both parties defect and attempt to take advantage of each other, then both parties are mildly punished because neither party gets any type of reward.
Another scenario in which the author describes the prisoner’s dilemma is war. The author uses the Holocaust as an example and explains that the Jewish people took a ‘cooperate’ approach while the Nazis defected. Read the piece to get more details, but the author provides several reasons as to why the Jewish people cooperated as the Nazi’s took advantage of them and sent them to concentration camps, resulting in the worst genocide in history.
The last scenario I will touch on from the link above is love. The author proposes that for a marriage to be successful, an ‘all cooperate’ approach must be taken. This means two spouses trusting and loving each other unconditionally in every situation. When one spouse begins to be jealous or starts to choose him/herself over sacrificing for the spouse, then the relationship begins to deteriorate. Relating this to the prisoner’s dilemma, this situation is the equivalent of one party cooperating while the other party defects. The cooperating spouse is punished by the ramifications of the defecting spouse’s neglect to the relationship. When both spouses defect, then the relationship essentially comes to an end because there is no longer any reward for either party, only punishment.
The prisoner’s dilemma is a very important concept when attempting to understand the world around us and the situations that we are a part of. If we could all collaborate and agree to all cooperate, many of these situations would have better results and fewer punishments (whatever the form); however, unfortunately, we are all prisoners.