The Foundation of the Criminal Network
In Passion Within Reason, Robert H. Frank explains how emotions that are seemingly irrational influence networks in ways that tangibly serve us. He revisits the classic “Prisoner’s Dilemma” with the new perspective of seeing how irrational emotions solve “the commitment problem,” the fact that each player cannot commit to the other player because of self-motivated interests and cannot fake being irrational for strategic gain.
Normally, pure, self-serving rationality would dictate that the dominant strategy of the prisoner’s dilemma is to always confess and compromise the other player or players in the game. However, if both of the players play the dominant strategy, the net payoff is considerably worse off than if they had not confessed and received diminished jail time for a less serious crime than the one they confessed to. It is a strange irony that what is individually the best strategies for the players is the worst strategy for the net payoffs of the game. However, in practice, people do not always follow the “rational,” dominant strategy for individuals and instead follow a strategy that serves all of the players in the game best, especially if the players previously knew or had contact with the other prisoner. Robert H. Frank conducts studies in which people are exposed to the other person who will be in the game for various amounts of time before the game actually begins. This gives people the opportunity to guess whether the other player will defect or not. A significant number of the players cooperate instead of defect, which is an interesting outcome considering how little contact the players have had with one another.
It is easy to extrapolate the principle of “the commitment problem” to criminal networks whose well-being is solely contingent upon trust. Criminal networks have to have the faith that no one member of their clan will approach the police and bring the whole operation down. For this reason irrational emotions serve the common welfare in multiple ways. First, the threat of retribution from someone within the organization gives a very pertinent disincentive to reporting on the others. The effectiveness of the threat has to do primarily with how irrational the person threatening is. Someone who will deal retribution beyond what they are retaliating for makes offending him or her even less enticing. This precise reason is why many punishments given by drug dealers are so harsh compared to what was done to them. Prevention is only effective if the drug dealers appear to respond irrationally. Second, irrationality plays an important role in trust. Members of a criminal organization need to be confident that the other members of that organization will have their best interest in mind as well as their own. Pure self-interest in many scenarios, such as the prisoner’s dilemma, would breed results that are not the best interest of the group as a whole. Trust and loyalty solve the “commitment problem” in this case. Both members can be confident that the other will hold up their side and so the net payoff is maximized for the group. As one can see, irrational emotion plays an incredibly integral part in the fabric of networks, and in particular, criminal networks.
Sources:
http://www.robert-h-frank.com/PDFs/MoralSentiments.pdf
Passions Within Reason by Robert H. Frank