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One of the most popular models in game theory, the prisoner’s dilemma represents a compelling story with a range of takeaways.
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- Identify win-wins.
Take time to consider the possible win-wins, even with potential competitors. What ar ...
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In real life, we mostly deal with repeated Prisoner's Dilemmas, where we can choose strategies to reward cooperation or punish betrayal over time. The incentives that individual decision-makers face are also altered by collective action such as rules, laws, and social punishment.
We generally also have the opportunity to communicate within our versions of the prisoner’s dilemma, so we can negotiate and seek a level of confidence not possible in the story.
Listen to this amazing podcast episode of golden balls.
Radiolab presents a truly gripping investigation into a game show based on the prisoner's dilemma. It really is fantastic storytelling and is highly recommended as a fascinating insight into this model.
Global warming.
If countries acted cooperatively, they would cut carbon emissions to help reduce global warming, possibly taking a hit to their economy as a result (let’s put renewable and green driven economies to one side for this example). However, if a country believes that another country will not take the action required then they might fear for the resulting economic advantage they will gain. The mistrust underlying a cooperative strategy, even when it's in everyone's interests, might lead to an individual strategy rather than a cooperative one.
Cigarette advertising.
A common example cited in relation to the prisoner’s dilemma is the cigarette industry. When cigarette advertising was legalised in the US competing firms theoretically could benefit from not advertising and sharing the market. If one advertised, they would gain a dominant share, however, if both advertised they would split the market and have less profit because of advertising costs. It is of course more complex than that, particularly in terms of growing a market with advertising, but that challenge plays itself out in a range of contexts.
The Prioner's Dillema is part of game theory, and provides an understanding of how we can work together, or not.
Use the following examples of connected and complementary models to weave the prisoner’s dilemma into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above.
Connected models:
- Game theory: the prisoner’s dilemma is a model from game theory.
- Mutually assured destruction: in terms of finding a shared, often counterintuitive, interest.
Complementary models:
- Red Queen effect: in considering a potentially escalating competitive environment.
- Divide and conquer: splitting the battle rather than fighting head on.
- Cialdini’s six principles of influence: to create greater connection and trust.
- BATNA: in the context of negotiated solutions.
- SCARF model: to understand when mistrust and threat dominate.
The Prisoner's Dilemma was originally posed by mathematicians Merrill Flood and Melvin Dresher while working for Rand corporation in the 1950s. It was actually named sometime later by Princeton mathematician Albert Tucker.
The model gained a boost of profile when it was featured in Robert Axelrod’s book, The Evolution of Cooperation in 1994. Now in its fifth edition, the book is the foundation for the ‘tit for tat’ strategy outlined in this model’s summary during iterative prisoner’s dilemma scenarios. Though he did note it was dependent on a number of factors. You can read more about his research in this New York Times article.
Finally, if you want to experience the concepts in the Prisoner's Dilemma, it's worth investing about 30m into this free interactive and educational game.
My Notes
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