The Prisoner’s Dilemma is sort of a thought experiment in the field of game theory (where mathematics are used in an attempt to model human choices). Although there are very many different variations on the game, the central feature is that the rational decision is not the decision that would provide the best outcome.
Here’s one of my favorite variations on the game. Imagine Bill Gates comes to you and a dozen of your friends and offers you this deal: each of you, without consulting or showing the others, must write down a single letter, either “C” or “D”.
After everyone has written down their letter, they are all revealed simultaneously, and everyone is given a payout based on what they wrote and what the others wrote. If you wrote a “C”, you collect $100 dollars for every other “C” in the group (not counting your own). If you wrote a “D”, however, you collect $5 plus $10,000 for every “C” in the group.
If there are twelve other people playing, then your maximum theoretical payoff is $120,005—you are the only “D”, and everyone else is a “C”. If everyone chooses “C”, on the other hand, then everyone walks away with $1,200. Your minimum theoretical payoff, unfortunately, is $0—if you’re the only “C” and everyone else is a “D”.
The “Prisoner’s Dilemma”-esque part of this game is that, no matter what everybody else picks, you are always better off by writing “D” rather than “C”. No matter what. So, rationally, everyone writes “D”—and goes home with five bucks in their pocket instead of over a thousand bucks apiece.
Game theorists call the $10,000 lure “the temptation to defect”. Ever since learning about the Prisoner’s Dilemma, I see examples of it everywhere. For example, at sports games where everyone is standing the whole time instead of comfortably sitting down. If everyone sits down, everyone can see just as well as if everyone is standing up. But the temptation to defect—the idea that if I’m the only “D” in a world full of “C”s—is very strong. I can see a whole lot better if I’m the only one standing up and everyone else is sitting down.
Similarly when I’m picking up my luggage at the airport carousel—if everyone stands back a few feet from the carousel and waits until they see their bags, then it’s moderately easy for everyone. But there’s that temptation to defect—the idea that I could be the only one standing right next to the carousel, and everyone else stands back, making it slightly easier for me—that pushes everyone towards the conveyor belt. In the end, it’s more difficult for everyone to get their bags off than it would be if everyone stood back a few feet. But the rational choice—the one that leaves you better off no matter what everyone else does—is to get as close to the carousel as possible.
Recently I’ve realized that the public funding of sports stadiums (as well as government subsidies to local businesses) is a perfect example of a prisoner’s dilemma. Seattle taxpayers give millions of dollars to the Seahawks (the local football team), and in exchange, they graciously agree to stay in our city. If the taxpayers threaten to withdraw the funding, the Seahawks threaten to leave the city for another city who’s willing to give them the money they want.
If every city cooperated and refused to build stadiums and fund teams with taxpayer money, then the stadiums would still get built and the teams would still play wherever there were large numbers of people interested in sports. But the temptation to defect—the idea that your smaller city can bring in more tax revenue and rejuvenate local industries if you simply offer some cash to a team who wouldn’t normally set up shop there—wins out again. In the end, of course, the larger cities also defect and offer more cash to the teams who would have built stadiums in the larger cities to begin with, leaving everyone exactly where they started—except the taxpayers a little poorer, and the NFL a little richer.




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