The Prisoner's Dilemma

By Leon Felkins,

General Model of the Two player Game

The Prisoner's Dilemma model as presented by Robert Axelrod, Douglas Hofstadter,
and others (See References), goes as follows:
Two prisoners, lets call them Joe and Sam, are being held for trial. They are being held
in separate cells with no means of communication. The prosecutor offers each of them
a deal. He also disclosed to each that the deal was made to the other. The deal he
offered is this:
a) If you will confess that the two of you committed the crime and the other guy
denies it, we will let you go free and send him up for five years.
b) If you both deny the crime, we have enough circumstantial evidence to put both of
you away for two years.
c) If both of you confess to the crime, then you'll both get 4 year sentences.
Put yourself in Joe's position. If Sam stays mum and you sing, you get zero years. If he
stays mum and you stay mum, you will each get 2 years. On the other hand if both of
you confess, you both get 4 years. Finally, if he confesses and you don't, you will get 5
years. Whatever Sam does, it is to your advantage to admit your wrong doing. Of
course, Sam is also a rational person and he will, therefore, come to the same
conclusion. So you both end up confessing which nets a total of 8 man-years in the
pokey. The paradox is, if you had both denied the crime, a total of only 4 man-years
would be spent behind bars. Wait a minute! Can it really be that rationality leads to an
inferior result? Let's look at this one more time. We will use a payoff matrix, a common
tool of the game theoreticians. The payoff matrix is usually presented in the following
form:
ACTION PAYOFF
Joe Sam Joe Sam
Cooperate Cooperate -2 (R) -2 (R)
Cooperate Defect -5 (S) 0 (T)
Defect Cooperate 0 (T) -5 (S)
Defect Defect -4 (P) -4 (P)

(The codes represent standard terminology for each action:

R Reward for mutual cooperation

S Sucker's payoff
T Temptation to defect
P Punishment for mutual defection )
The general form of the Prisoner's Dilemma model is that the preference
ranking of the four payoffs be, from best to worst, T, R, P, S and that R be
greater than the average of T and S. That is, any situation that meets these
conditions will be a "Prisoner's Dilemma".
In summary, the Prisoner's Dilemma model postulates a condition in which the
rational action of each individual is to not cooperate (that is, to defect), yet, if
both parties act rationally, each party's reward is less that it would have been if
both acted irrationally and cooperated!
The model can be applied to many real world situations, from genetics to
business transactions to international politics.
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References:

1. Axelrod, Robert. 1984. The Evolution of Cooperation. New York: Basic Books. A
sample of his work is on the internet at this site.
2. Hofstadter, Douglas R. 1983, "Metamagical Themas: Computer Tournaments of the
Prisoner's Dilemma Suggest How Cooperation Evolves". Scientific American 248
(no.5):16-26.
3. On the Internet: http://pespmc1.vub.ac.be/PRISDIL.html or click here. Author:
F.Heylighen. Date: Apr 13, 1995 (modified)
4. See the PARC papers on Dynamics for some simulation results
5. For an introduction to Game theory, check out Al Roth's Game Theory and Experimental
Economics Page
6. Related games ("Game of Chicken", etc.) are briefly discussed in "CURRENT
RESEARCH IN SOCIAL PSYCHOLOGY"
7. Ridley, Matt. 1996. The Origins of Virtue. New York: Viking.
8. A non-technical, easy to read book: Murnighan, J. Keith. 1992. Bargaining Games. New
York: William Morrow and Co. (A chapter is on line here)
9. Taylor, Michael. The Possibility of Cooperation, 1987, Cambridge.
10. Several other essays are on the Internet. You can look at the Constitution site for several
references or just do a search on "Prisoner's Dilemma".
The Prisoner's Dilemma in Business
Business life is rife with prisoner's dilemmas including the employer-employee
relationship and that between vendor and customer.
If I offer a job and you take it, we are both offering an immediate sacrifice. I am
trusting you with the key to the door, with money, with confidential
information, with clients. I am giving up the opportunity to hire someone else.
You are giving up the opportunity to work somewhere else and are trusting me
to pay you, give you a growth path and the training you desire. You are also
trusting me not to fire you and leave you in a position where you will have a
hard time getting another job.
As a new employee, you may not be productive for me for a period of anywhere
from a month to two years while you learn your trade. (The entry level
salespeople my company hires out of college take almost two years before they
begin repaying our investment in them, as they have a lot to learn about
technology, the industry and sales techniques first.) If you leave after I train
you but before you begin producing for me, you have a set of tools with which
to go out and make money elsewhere and I have received the sucker's payoff.
If we learn to play in the cooperation zone, you may wind up feeling as if the
company is your family, and I may feel you are a vital part of it because of your
diligence, trust and good faith. And we may both thrive together.
Similarly, a company engages in a prisoner's dilemma with its vendors and its
clients. (One scenario is analyzed in The Prisoner's Dilemma in Software
Development.) In recent years, we have seen one large client repeatedly prune
its vendor's list, throwing out smaller vendors and even forcing their
employees, who the client wished to retain, to work for a larger vendor still in
the account. This defection is possible because, given the relative size and
power of the parties, the future had no shadow for the client; the defection of
smaller vendors could not harm it, their cooperation had no meaning for it, and
the future had no shadow.
Constant rounds of the game also take place between executives in different
parts of a company. Here is a parable based on a real example I have
witnessed. Suppose my company sells calculators. We wish to expand into
personal digital assistants (PDA's) and create a division to manufacture and
sell these. Our salespeople are thrilled; the existence of the new division
extends their range; instead of being thrown out of the account by clients who
need something more, they now have something additional to offer. They are
playing the cooperation card, referring business to the PDA division yet
trusting that it will not attempt to supplant them in their own accounts.
Imagine now that the executive brought in to run the new division does not
understand that he has entered a web of cooperation. His salespeople never
return the favor; they will go all out to convince a client which really only needs
a calculator that it needs a PDA, and, because several clients have demurred,
they are now asking their boss to manufacture their own line of calculators.
Besides which, PDA's are hard to make and to sell...Because they have played
the defection card, all synergy has now been lost, and though so much was to
be gained in cooperation, the original calculator business has now cloned an
evil twin intent on competition. Such things happen every day.
The Scorpion
The story of the frog and the scorpion has been cited everywhere from
discussions of mid-east terrorism to the movie The Crying Game. In the story,
a scorpion and a frog meet on the bank of a stream and the scorpion asks the
frog to carry him across on its back. The frog asks, "How do I know you won't
sting me?" The scorpion says, "Because if I do, I will die too." The frog is
satisfied, and they set out, but in midstream, the scorpion stings the frog. The
frog feels the onset of paralysis and starts to sink, knowing they both will
drown, but has just enough time to gasp "Why?" Replies the scorpion: "Its my
nature..."
Please note that the story does not portray a prisoner's dilemma. The frog has
absolutely nothing to gain by carrying the scorpion across, and is therefore a
foolish altruist, proving the truth of the adage, "No good deed goes
unpunished." But it is not hard to turn the story into a prisoner's dilemma, as
follows.
The frog desires to cross the stream but is afraid of a stork on the other side.
The scorpion has no means to cross the stream but is capable of scaring the
stork. If the frog carries the scorpion across, the scorpion will reciprocate by
frightening away the stork; the scorpion will have crossed the stream and the
frog will be safe. The apparent sucker's payoff for the frog is that the scorpion
will slip away without scaring the stork once the frog has gone to all the trouble
of carrying him across. There is no apparent sucker's payoff for the
scorpion--the frog's major opportunity for defection is not to carry the scorpion,
but, since the scorpion will not yet have had the opportunity to extend its
cooperation it will not have lost anything (the moves are not simultaneous).
Perhaps the frog's defection may consist of eating the scorpion, once it has
scared off the stork.
In any event, the scorpion's unexpected and self-destructive defection raises
the issue of how to counter a player who defects first, and defects in a way that
prevents you from retaliating on the next move (your life has ended in the
meantime.) All assassins and terrorists play the game this way. Because they
are willing to die--it is their nature--the future has no shadow for them. This
madness is not unique to humans--the bee that stings to defend the hive, then
dies, is a suicidal defector in nature.
Gandhi succeeded in his variation on the prisoner's dilemma because the
British were not willing to resort to the ultimate defection. A player, like the
Nazis, willing to stop at nothing, creates an illogical loop much like the one that
results when two players play a series for a known number of moves. Since, on
the last move, the future has no shadow, I might as well defect. Since the other
player will certainly be smart enough to defect on that move as well, I may as
well defect on the move before, when he may still be cooperating. But, since he
is smart enough to reason this through the way I did, he will probably defect
on that move too. So again I will consider defecting a move earlier. But so will
he. The result: we both defect on the first move and each move afterwards.
Because the scorpion will kill you as soon as it is given a chance, you must
find a way to defect earlier than the scorpion, and decisively. But the scorpion
will study the situation, looking for a way to defect earlier than you can; so you
must assume he will do so, and seek to defect earlier still. Like gunfighters in a
Western movie who run down the street at each other, howling and shooting as
soon as they catch sight of each other, the prisoner's dilemma escalates into an
immediate duel to the death. The concept of a pre-emptive strike expresses
nothing other than a strategy based on defecting early and decisively.
Tarquinian's symbolic cutting of the tops from the tallest flowers, or the
massacre of opponents after any coup d'etat in history, are other examples.
It is the scorpion that pulls humanity down. If you are not yourself a scorpion,
you still are unable to play every move of every game in the cooperation zone,
because sooner or later you will meet a scorpion. Not every scorpion is a
suicide bomber; the law partner who made a successful motion to cut my draw,
forcing my resignation from a law firm, suffered the symbolic fate of the
scorpion when the firm's biggest client (the one I alone knew how to service) left
as a result, and the firm folded. Yeats' judgment that "things fall apart, the
center cannot hold", because "the worst are full of passionate intensity" is a
recognition of the fact that there are scorpions.
Scorpions may know the consequences, and not care, like the suicide bomber,
or may, through vanity and denial, refuse to see the consequences, like my
ex-partner. In any event, the effect is the same: a player defects when there is
no reason to, and something--a life, an enterprise--ends as a result.
Game theory does not really take scorpions into account. It holds that people
will defect because that is in their best interest--because the future has no
shadow. Game theory fails as a tool when we are dealing with sociopathology or
extreme denial. The human dilemma is that all progress ultimately fails or at
least slides back, that anything once proven must be proven again a myriad of
times, that there is nothing so well established that a fundamentalist (of any
religion or stripe) cannot be found to deny it, and suffer the consequences, and
then deny that he suffered the consequences.
All rivers begin in the human heart and, as I said recently in my Auschwitz
essay, the human heart is infirm. The saddest saying I ever heard, "trees never
grow into heaven", will be true for so long as we have scorpions.
Dr.B.P.Patra
XIM, Bhubaneswar

Case Study
Prisoners Dilemma
SA-SE-MI-RAA
(A story of Trust based Ethics which I heard from my Grand Mother in childhood)

Long, long ago, there was a king. Once he set out for a journey to jungle for hunting
along with his associates and his son. Suddenly it rains like cats and dogs. The prince
was detached from the group. Even his horse was separated from him in this tragedy.
Suddenly a tiger chased him. The prince was frightened and climbed up a tree for
help. He found a bear and took his asylum. Even if the bear was a beast; the animal
provides the prince lot of courage and told him not to panic. The tiger stayed beneath
the tree. After a while, the prince felt sleepy and conveyed this message to the bear.
The bear instructed the prince to sleep on his lap. The prince slept.
Now , the tiger addressed the bear
“Hey.. Bear, Prince is a human being and you are an animal. Do not
believe him. Kick him so that I will eat him and go.”
But the bear was quite committed to his friend. He cooperated with his friend prince
and strictly denied the tiger. After sometime the prince woke up. Now Bear felt sleepy
and slept on the lap of his friend. After sometime, tiger tried to instigate the prince to
kick the bear.
Tiger persuaded the prince
 “Hey.. prince, bear is an animal and you are a human being. Do not believe
him. Kick him so that I will eat him and go. Otherwise, the bear will eat
you.”
The unfaithful prince kicked the bear. But the bear woke up and held one branch of
the tree. Bear became angry and told “You are under my asylum. I will not kill you.
But I will curse you to recite “SA..SE..MI..RAA” till your death.” Next morning the
tiger left the place and the prince moved to his kingdom reciting SA.. SE.. MI… RAA.
He was treated under a pundit who recited Slokaas (In Sanskrit) on each letter.
Though the slokas reflect the situation which is quite ancient, it applies to the entire
mankind in the universe even now.
SA : “Sadbhaba pratipannanam Banchanekaa bidagdhataaa,
Hantum aaruhya suptaanaam hantum kim naama Paurusam?”
Meaning : There is no credit in cheating a close friend or an honest partner in any
activity (Includes business also) with whom you have a very good
relationship. It is similar to the case of killing an individual while he
sleeps.
SE: “Setum Gatwa Samudrasya Gangaa Saagara Sangamam
Bramhahapi Pramuchyeta Mitradrohi Na Muchyate”
Meaning : If you go to the Sangam of Ganga, Jamunaa and Saraswati for an excuse,
you may be excused if you have murdered but you will not be excused if
you have killed your friend.
MI : “Mitra Drohi, Krutaghna Jascha Biswaasha ghaatakaha
Traya tee Narakam Jaanti Jaabada Bhuta Samplabam”
Meaning : Three people always go to hell. One who has committed Blunder with his
partner or Friend, one who cheats a partner or friend from whom he
received help and the person who cheats a partner who has trusted him.
This had happened in past, now it is happening and it will also happen in
the future till the existence of the mankind.
RAA: “Rajan nija Putra sya Jadi Kalyanam echhati,
Dehi Danam Bramhanasya Debataa raadhanam Kuru”
Meaning : “Hello Raaja, if you want your son to be cured, then give gifts to Brahmins
and worship God.”

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