After the exercises we did in class I became very interested
in Prisoner’s Dilemma and how it applies to different types of real world
situations. This Article by Elvis Picardo, explains how the prisoner’s dilemma
translates to businesses and the economy in the United States. He uses the example
of Coke and Pepsi battling in the market to be the most competitive. If Coke
were to lower their prices and Pepsi remains at their price, than coke will
sell more coke and vice versa. In the end though if neither drops their price
it is not the best case scenario but is the second best. Therefore the Prisoner’s
Dilemma in economics is very similar to the Prisoner’s Dilemma of International
Relations. Picardo then goes on to give a few examples of how to use it in our
lives. He uses a salary negotiation as his example. He suggests that one should
not take the first offer given by an employer because you may able to get more
money out of it, but the employer might say that a higher salary cannot be
given. If that same person takes the job immediately the employer may be
satisfied but the person could have made more money.
What I have learned from Prisoner’s Dilemma is that without
communication between both parties there is no correct answer. If the parties
communicate they can find a ground in which both are satisfied. In these cases
both parties cannot be completely satisfied but the middle ground would be
better than receiving nothing at all. Communication can apply to both economics
and international relations. Companies are able to talk to other companies of
the same good about pricing, just as a country to talk to another country. Although
in the game The Prisoner’s Dilemma no communication is allowed, if this came up
in my life I would try first to communicate with the other party. If no
communication was allowed then I decided that I would defect (or in our game
give up the other person) because the results are either win or get a reduced
sentence, which is better than taking the gamble of not defecting and the other
person defecting. Therefore, if possible communication is the best case
scenario, but if there is miscommunication or an untrustworthy partner, than
defecting would be the second best decision. To use the salary example.
Communication would most likely not work because the employer may not be
willing to have an open conversation about what your salary should be and
therefore defecting and saying a high price may cause the employer to raise the
salary at least slightly.
This is an interesting thought. I found the game theory stuff to be very interesting. While I found the prisoner dilemma interesting, it's more of a moral question to me, then a logic one. obviously the person should defect, because if they do, not only do they have the potential for winning big, but it's also a safe choice. High risk low reward.
ReplyDeleteI find the car scenario much more interesting. This is a real question. Because it's big risk big reward, while there is a safe option. This one is much less straight forward. There is not a clear cut logical answer. The reward option is dangerous, and the safe option is not good. This makes it a much more interesting situation, because both sides want to win big, but don't want to lose big either. Because the answer is less clear cut, i find it a much more intriguing answer.
I agree that defecting is the best option in the prisoner scenario, however, i think that chicken and hunter are much better questions because the "solution" is much less clear.
You talk a lot about communication, however, you don't discuss trust. In the real world it is every man for himself (or herself), so when do you trust another person, and when do you take advantage of their trust. If it is the prisoner question, and you talk before and agree to both no sell each other out, should you follow through with your word, or try to take advantage of the other person?
Ryan,
ReplyDeleteNice job man. It's really interesting how you brought the workplace into this. You say that resisting the initial price may be the best way to go because there can potentially some benefit, and you compare this to the prisoner's dilemma where defecting is the best option. But do you think sometimes political actors are willing to take great risks, and potentially receive a great reward? Or do you think political actors act conservatively? It's definitely hard not being able to communicate, so actors have to make a tough decision. Also, in the international sphere countries are competitive with each other and if the countries are enemies it would make sense to rat the enemy out. So in this sense ratting the enemy out can significantly benefit the country who ratted out the enemy. Same goes for prisonner's dilemma.
Great post.
Hi Ryan,
ReplyDeleteGreat job on this post! I was hoping someone would write on Game Theory because it was one of my favorite classes. You say here that defecting is the second best option when communication is not an option. This results in the least amount of loss to oneself, but as seen in the class example with candy bars, when you defect the short term effect is positive- you get away with no punishment and the other person is made to bear the blame. However, it seems to me that the long term effect is negative at least in part, because you have burned a bridge with that partner who you made to take the fall and furthermore, you now have a reputation for leaving your partner out in the cold. This will make you a less trustworthy actor and others will be less willing to build relationships with you. This, of course , is a relational-focused constructivist approach- what do you think about it?
Hi Ryan,
ReplyDeleteGreat job on this post! I was hoping someone would write on Game Theory because it was one of my favorite classes. You say here that defecting is the second best option when communication is not an option. This results in the least amount of loss to oneself, but as seen in the class example with candy bars, when you defect the short term effect is positive- you get away with no punishment and the other person is made to bear the blame. However, it seems to me that the long term effect is negative at least in part, because you have burned a bridge with that partner who you made to take the fall and furthermore, you now have a reputation for leaving your partner out in the cold. This will make you a less trustworthy actor and others will be less willing to build relationships with you. This, of course , is a relational-focused constructivist approach- what do you think about it?