What the #e** are you doing? It might affect me!

A Game Theoretical Explanation

In a country, rather I should say in an environment, where a person is issued a death certificate when he requests for a wound certificate from a government hospital, and where a politician tries to indict others when he's caught into some fraud with strong evidences, and where we have to carry out a campaign or something like candle march protest for almost every other thing that should ideally be our rights such as getting metro rail project completed in time, saving girl child, having a effective Lokpaal, among others, it becomes very important how our neighbors behave. Neighbors do not necessarily mean that he or she should be staying or working just beside ours, rather every human being of this universe is our neighbor in some sense or other in this really localized world (by the way, why am I talking about only human beings? Isn’t animals and also the aliens our neighbor? Wikipedia describes neighbor as “A person living near or next door to the speaker or person referred to.”  Another standard dictionary defines the term as “A person who lives near another; one whose abode is not far off.” In those contexts, all human beings, Ah! Why again only human beings? Let me correct it! All human beings, animals, planets, and even aliens are our neighbors, because their abode is not very far off from ours, isn’t it? If not literally, then at least virtually they are stationed very much close to us. So, it is natural that one’s action will affect the others’ and vice versa. Do you agree? Nope? No worries! Let me tell you this simple phenomenon with the help of a simple example.

The Prisoner’s Dilemma, originally developed by Rand Corporation’s scientist Merrill Flood and Melvin Dresher in 1950, and subsequently articulated by Albert Tucker in its current form, is a fundamental problem in the Game Theory. It demonstrates why two people might not cooperate even if it is in both their best interests to do so. Now, game theory, an interesting concept widely used in social sciences, formal sciences, as well as life sciences, tells that an individual's success in making choices depends on the choices of others. So, Prisoner’s Dilemma tells us that even if we behave or attempt to behave in a supremely selfish manner, our actions are not always in our interest.

The Prisoner’s Dilemma can be explained in a hypothetical situation where I and you are conspirators in a crime, and we both are being interrogated in two separate cells and are not permitted to communicate with each other. Like all human beings, we are too highly selfish and assume ourselves as coldly rational. The officer who is interrogating us tells us separately that he has got sufficient evidence against each of us to put us in prison for two years. He further tells us that if you turn informer against me and help the officer to prosecute me, he will let you off right away but I would be given a sentence of five years straight. Then he makes the same offer to me also and we both are well aware that the identical offer is made to each of us. But the punch is that if both of us confess everything against other, we both will be away for four years each.

Well, so far so good! A typical Bollywood 70s-flick sequence, isn’t it? What should be the ideal course of action?

To quote this for Games Indian Play (written by Prof. V. Raghunathan of IIMA), the payoff sequence for each of us will be as follows, where the years behind the bars are indicated as negative numbers since it represents the undesirable consequence.

(1)   If you and I both cooperate and do not squeal on each other [U_C – I_C]:

·         We both will get away for two years each (–2, –2);

(2)   If you defect and squeal on me while I cooperate and do not squeal on you [U_D­ – I_C]:

·         You get off right away while I get prison for 5 years (0, –5);

(3)   If you cooperate and do not squeal on me, while I defect and squeal against you [U_C – I_D]:

·         You’re put behind for 5 years, but I get free right away (–5, 0);

(4)   If you and I both defect and squeal against each other [U_D – U_D]:

·         You and I both are put behind the bars for 4 years each (–4, –4).

So, these are the four possibilities. Being highly selfish and coldly rational, our responses to the offer will be what we believe as best for each of us; here friendship, decency, fairness and graciousness all are irrelevant. If we follow Game theory, ideally we should not squeal on each other (Option 1), in which case we both will get only two years of imprisonment (–2, –2) for each of us. But what exactly happens in such situation is like this: I believe that if you squeal on me and I don’t, you will get free and I will be put behind the bars for five years i.e. Option 2 (0, –5); you will feel the same i.e. Option 3 (–5, 0). So, hoping that you must be squealing on me, I also squeal on you, consequently, we both end up with the Option 4 (–4, –4)! Now, you tell me: is it purely rational and in our self-interest? NOPE! Not at all. But this is how we actually behave and act.

The above example is relevant to how our beliefs affect others’ positions as well as ours. We believe that we are acting rationally and doing what is in our best interest, but incidentally it turns out to be  bad for our neighbors (remember who’s our neighbors?), and worse for ourselves! Be it being silent on some serious issues, or anything else, it requires us to think more deeply before we take our steps out. Well, you might be wondering (by now, for sure) whether these issues have implications for our financial behaviors and other related actions of ours! Yes, of course! I would say. How? That I leave for you to think upon. Just conclude by saying that think of your neighbors (???) before each of your next moves next time.