Trust and The Prisoner’s Dilemma
Game theory makes it easier for us to determine how to make our decisions. By analyzing what choices would result in the best possible outcome for the individual, a clear-cut answer can be found, even in what may initially appear to be a complicated problem.
Take, for example, the famous Prisoner’s Dilemma. Through rational reasoning, the best strategy (confessing) can be found. However, this leads to the “paradox” of the scenario, which is that if both prisoners confess, the outcome is actually the worst collective outcome possible.
This illustrates the idea of human behavior and how it leads to problems with applying Game Theory to real life. The article describes the situation of General Stanley McChrystal who took over the Special Operations Command and found that despite leading some of the highest performing units of the world, the units often had difficulties working together effectively. The problem was not that the units were incompatible or otherwise not fit to integrate well, but that the units’ dedications to their own team was so strong. Like the prisoners in the Prisoner’s Dilemma, each unit was looking out for its own best strategies. This dedication to their own mission sometimes overshadowed the missions of the other teams, leading to an overall lower level of performance.
This was interesting to me because it is often thought that rational decisions are superior to ones that have to deal with the “flaws” of human behavior. This does have much basis in truth, as many game theory situations do result in an optimal solution when every player acts rationally. However, as this article and the Prisoner’s Dilemma illustrate, there are cases when it is important to recognize the human aspects of real-life problems. The author argues that in these cases, it is necessary to build trust between players so that they can work on cooperation strategies instead of relying on a “tit for tat” strategy. Although game theory is a useful framework for understanding decisions, we can see that there are other factors to consider when applying this idea to real life.
http://www.forbes.com/sites/gregsatell/2015/08/08/how-to-build-trust-even-with-your-enemies/