Google’s Anti-Trust Hearings and Game Theory
Google is currently undergoing an investigation by the Federal Trade Commission regarding its monopoly-like behavior. Its competition is upset that they are putting their services and goods higher up on their search results, thus squashing competition such as the Microsoft and Yahoo partnership. This is a good example of the prisoner’s dilemma, in the sense that Microsoft and Yahoo are cooperating by not putting their personally profitable results in the top part of the search results, while Google doesn’t cooperate and is putting their profitable links towards the top, and is getting a much higher payoff than if it cooperated. The thing here is that the government has the ability to intervene in this particular prisoner’s dilemma in an attempt to put both companies at the cooperate-cooperate strategy where Google might get a slightly lower payoff but the overall payoff will be higher because Microsoft/Yahoo will be so much better off and the playing field will be leveled.
Game theory offers a great model in which to predict how firms might behave given no restrictions, or in what direction they will have a tendency to act. However, outside the model we have laws and government so that the prisoner’s dilemma can be somewhat regulated. It is interesting to see, however, that game theory takes place on such a large scale.
There is another factor into the payoffs of this dilemma. That is, the happiness of the user. It is preferable to the user to have all of their online resources such as mail, calendar, shopping, all in one place, which makes Google’s monopoly in these areas simplifying to the user’s experience, however it is not beneficial to the user if the results that come up in a search are just coming up because they are sponsored by Google, rather than because they are the most relevant or reliable. These sorts of issues are just examples of how complex the payoff calculations of a real-life example of the prisoner’s dilemma can get.
http://news.yahoo.com/google-head-disputes-company-thwarts-rivals-184254335.html