Thursday, September 30, 2004

Prisoner's Dilemma

Have you heard of the Prisoner's Dilemma?

The original prisoner's dilemma is a betting game with 2 players and one banker who adjudicates and pays out winnings to the 2 players. It goes like this:
In each of the two players' hands are 2 cards labelled COOPERATE and DEFECT. Each player can choose to play either card in a game, and it is placed face down so that the other player cannot be influenced by his/her move. The banker then proceeds to turn the cards over:

Outcome 1:
Both players played COOPERATE. The banker will have to pay each person $300. This sum is called the reward for mutual cooperation.

Outcome 2:
Both player played DEFECT. The banker fines each person $10. This is called Punishment for mutual defection.

Outcome 3:
Player 1 played COOPERATE; Player 2 played DEFECT. Banker pays Player 2 a Temptation payoff of $500 and fines Player 1 a Sucker fine of $100.

Outcome 4:
The reverse of Outcome 3.

It is obvious that the players will get more out of the banker by playing to outcome 1, but this is not always the choice taken by the players. Why is that so?

From a personal perspective,
if the other player plays COOPERATE, and
I play COOPERATE, I will get $300.
I play DEFECT, I will get $500.
if the other player plays DEFECT, and
I play COOPERATE, I will lose $100.
I play DEFECT, I will lost $10.

No matter what the other player plays, I will do better by playing DEFECT!

And thus we get a self-defeating result that each player plays defect and continuously pays the banker $10.

This selfish nature can sadly be seen in our everyday life (withholding of information in workplace, throwing/stashing away of products by companies to keep supply low [and thus price high] ) and it really makes me wonder how much we can do better if we'd work together (make it a better place.... for you and for me and the entire human race...lalalala...) for progress.

On a macro-scale, I cannot help but to compare this with the different modes of government, namely Capitalism/Democracy vs. Communism. Is that why Communism is recognised as the "ideal" mode of government that is sadly unrealisable, because of the selfish genes within each and everyone (almost) of us? I do not know. I am a simple man who bows to society's pressure.

Unless there are saintly suckers too good for this world, our game is doomed to end in mutual defection with its paradoxically poor result for all players.

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