2008/02/16 — grant czerepak
For the past several decades the Prisoners’ Dilemma has been a dominant frame in Game Theory. It’s quadrant model has crossed the boundaries of many disciplines especially political science, economics, business, biology, computer science and philosophy. There are also the games Stag Hunt, Chicken and Hawk-Dove which are 2×2 games. My argument in this post will be that the Prisoners’ Dilemma is not adequately representative of reality.
The Prisoner’s Dilemma was originally framed by Merrill Flood and Melvin Dresher while working on game theory at RAND in 1950 which Rand pursued because of possible applications to global nuclear strategy.
Albert W. Tucker formalized the game with prison sentence payoffs and gave it the “Prisoners’ Dilemma” name (Poundstone, 1992).
The game has two prisoners who cannot communicate and each has only two moves:
- to conceal their guilt or
- reveal their guilt
They are aware of the potential outcomes of their actions as follows:
The canonical payoff matrix for the game is represented as follows:
In “win-lose” terminology represents the game in the following manner:
The flaw I see in the Prisoners’ Dilemma is that it only provides the following payoffs:
- Win-Win (Collaboration)
- Win Much-Lose Much (Exploitation)
- Lose Much-Win Much (Exploitation)
- Lose-Lose (Altercation)
It does not provide for Win-Lose or Lose-Win (Distribution). The absence of distribution may be suitable for Mutual Assured Destruction (MAD) games, but not for most other human transactions. Consequently the Prisoners’ Dilemma can be presented as follows:
Now, I am going to take a different tack with the Prisoner’s Dilemma.
I am going to view it from the perspective of Stephen B. Karpman’s Drama Triangle, a concept derived from Eric Berne’s Transactional Analysis. However, I am going to adhere to game theory’s premise that the players are rational.
Stephen categorized interpersonal transactions into three roles:
In the Prisoners’ Dilemma there are only the Rescuer and the Persecutor:
In what I will call the Transaction Triangle game there are three roles and thus three moves:
In “win-lose” terminology the Transaction Triangle is as follows:
And the canonical payoff matrix is as follows:
As you can see, distribution is incorporated into the model to provide for most human transactions while still preserving the key components of the Prisoners’ Dilemma. I also concluded that the lose-lose payoff of the Ultimatum Game was suitable to provide for no transaction taking place. It is time to abandon the 2×2 mindset of mutual assured destruction and adopt a more human and realistic 3×3 game frame.