The Prisoner's Dilemma is a mathematical concept was developed in the 1950's. It sprang out of game theory, and I have found it extremely useful concept in explaining why people act the way they do. (the mathematician who named it was thinking of an opera story when he did.) You will find this story peppered with references to people either "cooperating" or "defecting." Those comments are made in the context of The Prisoner's Dilemma concept that follows.
Here is a quick and dramatic version of the kind of problem that Prisoner's Dilemma thinking can help anticipate an answer to:
Suppose you are about to make an illicit drug deal. Suppose this exchange is going to take place in a park being watched over by a vigilant policeman. This means that you can exchange packages, but you can't examine the contents of the packages until the exchange is completed and you have walked away from the park. Your "partner in crime" is on the other side of the park, and he has two identical briefcases. You know one of them is filled with money and the other is filled with newspaper. Likewise you have two identical briefcases, one is filled with drugs and the other is filled with cornstarch.
The question posed by The Prisoner Dilemma is: which of your two briefcases do you take to the exchange, and which does your partner?
| The Prisoner's Dilemma Cooperator/Defector Matrix | ||
| you / partner --> | cooperate (money) | defect (newspaper) |
| cooperate (drugs) |
deal succesful big gain for both |
sucker deal you lose bigtime |
| defect (cornstarch) |
sucker deal you win bigtime |
deal is a washout small loss or small win for both |
The question is simple, but the answer is not simple.
The answer depends on a lot of externalities. Those externalities help you decide if your partner is going to bring his money -- he is going to cooperate, or is he going to bring his newspaper -- he is going to defect. For instance, if you and this partner have been doing business this way for many years, and you are each members of the same community, it is very likely that both you and your partner will cooperate -- you are operating in a "double cooperator" environment, and you get a good payback for your effort.
On the other hand, if this is the first time you've dealt with this person and your not likely to deal with this person or anyone they know ever again, you have strong incentive to play that person as a "sucker" and give them cornstarch. If your partner feels the same way about you, then you have a "double defector" environment, and you are likely to exchange cornstarch for newspaper -- neither of you make as much as if you worked in a double cooperator environment.
If one of you really is a sucker, then you have a "cooperator-defector" environment. One of you wins big and one loses big, and it's likely the next transaction you have will be some sort of revenge transaction. (in Prisoner's Dilemma parlance, you will engage in a "tit for tat" strategy)
Looking at the world through this Prisoner's Dilemma prism can explain a lot of why people act the way they do. Marriage means two people have decided to engage in a long term double cooperator environment. Engaging in a strategic partnership means the same thing in business. Impending divorce, and impending bankruptcy, mean that a long term double cooperator environment is about to end, so there is strong incentive on both sides to become the first defector.
Double cooperator environments are risky but high yeilding, double defector relationships are safe but low yielding. When a person walks in off the street an buys a cup of coffee at a store for cash, this is a double defector transaction. If a store owner offers the local policeman a free piece of pie when he stops in, this is a double cooperator transaction.
A small, but growing, company gets a single copy machine. The president says, "All you employees may use this copier as you see fit, as long as it's for company purposes." and leaves it at that. This is a double cooperator relationship. The president is offering the copier and trusting that his employees will use it responsibly.
As the company grows, the president decides it must be departmentalized. He creates a Sales department and an Accounting Department. When asked about the copier, he thinks, and says, "OK, lets have that be catagorized as part of the Accounting Department." No other change is made. This is now a double cooperator environment between Sales and Accounting.
The company grows some more, but the president is worried, "Costs are ballooning." he says, and he tells the Accounting Department, "I want closer cost control."
One of the steps the Accounting Department takes is to put a log sheet by the copier, "Everyone who uses the copier must log their pages." says the Accounting department.
The Sales department people complain about the "Mickey Mouse paperwork" they have to do to use the copier. It's wasting their time, and they feel they have been "defected" against by the Accounting Department. Their solution: use part of their sales budget to buy a second copier for their department.
This is an example of moving from a double cooperator environment, through a transitional cooperator-defector environment, to a double defector environment. In this case the loser was company profits because where one copier could have served both departments, cost accountability made it desireable for the company to spend on having two copiers instead.
This shows some of the wide ranging ways this Prisoner's Dilemma concept can be used to analyze situations. You will see many more in this Novell story.
Double cooperator environments are typically more exciting and rewarding, as long as they work. Part of the foundation-laying that went on in the 1980-84 years at Novell was building a double cooperator environment among the founders. The End of the Visionaries period in 88-90 was transforming that exciting double cooperator environment back to a safe double defector environment.