5 ms·

Schneier comments: > The game is turned on its head Is that really true? What has changed? Player B still can't trust that player A will give him 50% of the m

by zorbo 15y ago

Schneier comments: > The game is turned on its head Is that really true? What has changed? Player B still can't trust that player A will give him 50% of the money outside of the game. Player could turn the tables by claiming he too will steal. Wouldn't that put them back to the original situation?

dsr_ 15y ago
You are assuming that social pressure either doesn't exist or is in favor of dishonesty. The first is not true, and the second is only true for limited peer groups. Consider how your family would treat you if you reneged on a verbal commitment you made on TV. For the vast majority of people, this is a major negative factor. Now add in your coworkers, employers, friends... Most people are honest most of the time, and especially so when there is a high likelihood of being caught cheating.
- Natsu 15y ago
  That exact line of reasoning is brought up during the discussion in this video of the end of another game: https://www.youtube.com/watch?v=y6GhbT-zEfc&feature=relmfu https://www.youtube.com/watch?v=y6GhbT-zEfc&feature=relm... That said, you're right about the fact that reputations matter. They just don't matter to everyone.
- ecmendenhall 15y ago
  Exactly. This is an example of a commitment strategy (http://plato.stanford.edu/entries/game-theory/#Com http://plato.stanford.edu/entries/game-theory/#Com), and it was only credible because others were watching. Reputation is a very common way we make credible commitments when we deal with one another, but the results might have been different without an audience. It's funny that the one-shot prisoner's dilemma is used so often as an example of rational self-interest leading to suboptimal outcomes or formal modeling failing to capture real behavior. This is true only for the most stylized models and simplest games. Really rational players will choose to restructure the rules and play a better game! Since prisoner's dilemmas were bad games, we figured out how to make credible commitments and overcome them. Since talk is cheap, we developed things like punishment and social norms to enforce commitments. Adding things like iteration, reputation, and punishment to simple games leads to complex cooperative outcomes that reflect real behavior—and we can model them by adding a few simple rules. I think it's a fascinating and optimistic view of human history: modern market-exchange societies are the outcome of a long process of figuring out how to turn bad-outcome games that encourage defection into positive-sum cooperative ones that benefit everyone. Yet we are still biased to ignore all the cooperation around us and see selfishness (here's one of my favorite papers on this subject: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=929048 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=929048). I've also found it a very valuable personal insight. When you find yourself playing a bad game, don't settle for choosing the least harmful payoff. Figure out how to change the rules.
  - drostie 15y ago
    I like to add to any discussion of Prisoner's Dilemma a similar note, something like: This is why contracts matter. It's clear that both parties would love to sign a contract saying "I'll scratch your back and you scratch my back," if the consequences of not obeying that contract were sufficiently severe, because they see that they can get a mutually better reward. The reason why criminals do better than game theory professors on the prisoner's dilemma game is not necessarily because they act irrationally, but because they're part of a social order which creates and enforces those sorts of cooperative systems, and which doesn't do business with folks who break them.
Natsu 15y ago
Assuming he can be believed, and we might note that there's no benefit to lying about choosing to steal, you change the game so the other guy's payoffs are zero for stealing and 1/2 the money (as modified by the chance he's telling the truth about that). So it changes the incentive from wanting to defect, to either getting nothing or choosing to trust him and maybe get something. Note also that he was going to steal at first, but changed his ball at the last second to cooperate. And the other guy lied about stealing, having chosen to split the whole time, never changing his ball.

by zorbo 15y ago

dsr_ 15y ago

You are assuming that social pressure either doesn't exist or is in favor of dishonesty. The first is not true, and the second is only true for limited peer groups. Consider how your family would treat you if you reneged on a verbal commitment you made on TV. For the vast majority of people, this is a major negative factor. Now add in your coworkers, employers, friends... Most people are honest most of the time, and especially so when there is a high likelihood of being caught cheating.

Natsu 15y ago
That exact line of reasoning is brought up during the discussion in this video of the end of another game: https://www.youtube.com/watch?v=y6GhbT-zEfc&feature=relmfu https://www.youtube.com/watch?v=y6GhbT-zEfc&feature=relm... That said, you're right about the fact that reputations matter. They just don't matter to everyone.
ecmendenhall 15y ago
Exactly. This is an example of a commitment strategy (http://plato.stanford.edu/entries/game-theory/#Com http://plato.stanford.edu/entries/game-theory/#Com), and it was only credible because others were watching. Reputation is a very common way we make credible commitments when we deal with one another, but the results might have been different without an audience. It's funny that the one-shot prisoner's dilemma is used so often as an example of rational self-interest leading to suboptimal outcomes or formal modeling failing to capture real behavior. This is true only for the most stylized models and simplest games. Really rational players will choose to restructure the rules and play a better game! Since prisoner's dilemmas were bad games, we figured out how to make credible commitments and overcome them. Since talk is cheap, we developed things like punishment and social norms to enforce commitments. Adding things like iteration, reputation, and punishment to simple games leads to complex cooperative outcomes that reflect real behavior—and we can model them by adding a few simple rules. I think it's a fascinating and optimistic view of human history: modern market-exchange societies are the outcome of a long process of figuring out how to turn bad-outcome games that encourage defection into positive-sum cooperative ones that benefit everyone. Yet we are still biased to ignore all the cooperation around us and see selfishness (here's one of my favorite papers on this subject: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=929048 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=929048). I've also found it a very valuable personal insight. When you find yourself playing a bad game, don't settle for choosing the least harmful payoff. Figure out how to change the rules.
- drostie 15y ago
  I like to add to any discussion of Prisoner's Dilemma a similar note, something like: This is why contracts matter. It's clear that both parties would love to sign a contract saying "I'll scratch your back and you scratch my back," if the consequences of not obeying that contract were sufficiently severe, because they see that they can get a mutually better reward. The reason why criminals do better than game theory professors on the prisoner's dilemma game is not necessarily because they act irrationally, but because they're part of a social order which creates and enforces those sorts of cooperative systems, and which doesn't do business with folks who break them.

Natsu 15y ago

Assuming he can be believed, and we might note that there's no benefit to lying about choosing to steal, you change the game so the other guy's payoffs are zero for stealing and 1/2 the money (as modified by the chance he's telling the truth about that). So it changes the incentive from wanting to defect, to either getting nothing or choosing to trust him and maybe get something. Note also that he was going to steal at first, but changed his ball at the last second to cooperate. And the other guy lied about stealing, having chosen to split the whole time, never changing his ball.