(Most of the content here on game theory is a direct copy-paste from wikipedia)
This may be one of the most difficult posts I made till now; not because I did’nt have any ideas, but because I find it incredibly difficult to express my thoughts in words; after all a man of few words is what I am.
In the last post I said Iterated Prisoner’s Dilemma ( IPD ) problem could explain many ( if not all ) of the reasons why we never played it right. In this post I will quickly narrate an example IPD type situation involving 4 agents: 2 are from India, and the other 2 from Weasel Land ( where they are really good at IPD games).
Assume that each player faces the other 3 in a match lasting 6 games. If one player gives evidence against a player who does not, the former gains 5 points and the latter nets zero. If both refrain from giving evidence, both gain 3 points. If both give evidence against each other, both gain 1 point.
When a weasel faces off against an Indian, the former refrains from giving evidence in the first game while the Indian does the opposite, gaining the Indian 5 points. In the remaining 5 games, both players give evidence against each other, netting 1 point each game. The final score is Indian, 10; Weasel, 5.
When Weasels face off against each other, each refrains from giving evidence in all 6 games. 6 x 3= 18 points for each Weasel.
When Indians face off, each gives evidence against the other in all 6 games. 6 x 1 = 6 points for both Indians.
The final score for each Weasel is 5 + 5 + 18 = 28 points. The final score for each Indian is 10 + 10 + 6 = 26 points. Despite the fact that the Weasels never won a match and Indians never lost a match, the Weasels still came out ahead, because the final score is not determined by the winner of matches, but the scorer of points. Simply put, the Weasels gained more points tying with each other than they lost to the Indians.
I hope you can see what I am trying to tell here: Envy, is the root of many problems we experience in our economy. Most of the games we play in our lives are not like chess ( which by the way is something Indians are really good at) ….that is, it is not necessary that whenever one person wins, other necessarily loses. In other words, the goal of most of the games in life is to maximize profits, NOT to profit more than your opponent.
To summarize, the reasons why India never played it right are:
- Absence of “unenforced cooperation” ( cooperation that is evolved from extreme competition )
- Involuntary Magical Thinking