Post 25: Introduction to (very basic) Game Theory
No ulterior motives here. . .
For no particular reason, I thought it would be a fun idea to talk a little about very basic game theory. Maybe at some point we will do a whole post talking about game theory in more depth and get all sorts of different examples and views. . . that sounds fun as well! But for now, I just kept the convo small and mostly focused on what is to me, the most basic example, (really the only one I know well), is the Prisoner’s Dilemma.
Extreme basics of the Prisoner’s dilemma, two prisoners have to decide if they will “cooperate” (stay silent), or “defect” (betray the other), and they never know for certain what the other will actually do. See the results of the choices below:
The point of the game is that because you can’t trust your opponent not to seek the most advantageous result for themselves, (defecting and hoping you cooperate), and the exact same thing is true for your opponent, it is always rational for both of you to defect, i.e. betray each other. (Because 3 years in prison is better than 5 years).
However, that only holds when you are only playing the game once. In real life an analogous game is often iterated by the same “prisoners”, (like nation-states). In this case there is an opportunity to try to cooperate in the hopes that your opponent may catch on and cooperate as well leading to a better sentence (outcome) for both of you, (1 year as opposed to 3). This is risky of course because if your opponent doesn’t cooperate you end up with 5 years or the worst result for you, while your opponent ends up the best result for them. But another nice advantage to the real world, players can communicate and form agreements, reducing the risk of defection and enabling stable cooperation. . .
Anyway, seriously not trying to make any kind of point here, although if you do happen to read or skim the dialogue below, (and it is on the shorter side of what I usually post), you will see that we do discuss an interesting real-world example. . . for no particular reason. Also, for the first time, going to mix up the order of the convo a little, again, for no real reason. . .
