The prisoners dilemma is one of most famous games in game theory and is relevant in many areas of life, from geo-politics to business negotiations and family feuds. A friend sent me an excellent video analysing the implications of the prisoner dilemma which I will attempt to summarise below...
The scenario is as follows: two prisoners can choose to either cooperate or defect. If one defects and the other cooperates, the one who cooperates receives zero points, and the one who defects receives 5 points (the highest possible reward). If both defect they receive only 1 point, and if both cooperate they each receive 3 points; the combined total of 6 points being the highest possible value generated.
In its simplest iteration, the prisoners dilemma states that if each party acts in a rational manner (ie in their own self-interest), they will defect. This is because they expect the other side to defect; and by trying to cooperate with a defector, you get zero. The result of both defecting is that they each only receive 1 point; a sub-optimal outcome.
Such scenarios happen when we don’t trust the motives of the other party, believing they will act in their own self-interest rather than the collective good. During the cold war, the US and the USSR stock piled tens of thousands of nuclear war heads spending over $10 trillion which could have been used for more productive initiatives. The two sides were locked in a psychology of defection, acting against the collective good for decades while both would have been better off agreeing to cooperate and not develop the technology further.
It took the US and the USSR a generation and $10 trillion to work out that their strategy of distrust and non-cooperation wasn’t working. In our business and family lives we don’t have that time or budget.
Prof. Robert Axelrod, a political scientist from the University of Michigan ran computer simulations of over 60 different strategies hundreds of times each against each other to understand the most effective approach to maximising value. Strategies were categorised as either “nice” or “nasty”. The nice strategies had a bias towards cooperation while the nasty strategies tried to take advantage of any perceived weakness in the other strategy and put their interests first.
As the game was repeated time after time, the most successful strategies in creating value were “nice” strategies. “Nasty” strategies that defected multiple times caused most other strategies to eventually do the same (ie trust was eroded) and the value created was low.
As in life, the simulation showed that for repeat games, if we don’t cooperate, we win less. Our business and personal lives are repeat games. We deal with the same people regularly and we tire of those that put themselves first always (ie use nasty strategies). We gravitate towards those who seek to create value and collaborate.
After 1,000 iterations of the game, only nice strategies survived. Initially nasty strategies prayed on the weakest of the nice strategies (ie those that were too forgiving or generous), but as these strategies die off, more robust collaborative strategies took over the ecosystem and the nasty strategies died off.
In simple English this means that in the long term, as we learn how to deal with them, collaboration will beat even the most aggressive strategies, even if the aggressive strategies were initially successful. In the short term it’s the environment that shapes the players, but in the long run it’s the players that shape the environment.
Prof. Axelrod’s research concluded that the best performing strategies shared 4 common themes which I believe are eminently portable into our meetings, negotiations and general communications:
1. Be Nice; don’t be the first to defect
2. Be Forgiving; you can retaliate when someone defects, but doesn’t hold a grudge
3. Be Retaliatory; don’t be a push over, strike back immediately otherwise “nasty” strategy users will take advantage of you, and
4. Be Clear; this allows the parties to establish trust by reducing the risk of misunderstanding which can be a common occurrence in high stakes communications.
So in summary; be nice, be forgiving, but don’t be a pushover!
If you would like to watch the full video, the link is below:
For short form videos, quick tips, useful quotations and other items related to soft skills. Please follow me on the following link! https://instagram.com/softskillsexpert?igshid=NTc4MTIwNjQ2YQ==
To catch up on previous blogs and make sure you’re not missing out on some great insights, check out the archives here.