Prisoners' dilemma

In Catch 22, Yossarian, as WWII is drawing to a close, explains to Major Danby how he does not want to be among the last to die, since it won't matter in the overall course of the war. Major Danby asks what would happen if everyone felt the same way, to which Yossarian replies, "Then I'd certainly be a damned fool to feel any other way, wouldn't I?"

When the rewards of defecting, or reneging, appear to favor the individual over the group, there is little incentive to stay with the pack. However, if everyone has this same thought, which they invariably do, the mass defection leaves the group, as well as the individuals, far worse off than if everyone had cooperated from the start.

In an experiment at Texas A&M, Professor Raymond Battalio had a class of 27 students play a game (taken from The Art of Strategy, Dixit and Nalebuff). Each student owned a hypothetical business and had to write on a paper, simultaneously and independently, whether to produce (1) item or (2). The (1) kept supply low but prices high, so higher profits could be achieved all around; (2) meant each individual could break away and produce more than the others and profit at their expense. The payoffs to students electing to produce (1) were maxed out at $1.08 if all 27 students wrote (1) and decreased $0.04 for each defection.

The reward to the first student who wrote (2) started at $1.54 and decreased $0.04 for each additional defector. If all students defect and write (2), then they each get $0.50. If they had cooperated, the individual payout would have been $1.08.

The exegeses, after several mock runs and explanatory sessions, shows the number of cooperating students who wrote (1), was 4. The total payout was $15.82, $13.34 less than would have been paid with unanimous cooperation.

I just read the TDN Prescription for Racing, released last summer (I understand I am a little behind the power curve here but I make up for it with my cunning and guile.) A more tragic comedy of errors I am hard pressed to recall.

There seems to be a consensus there as to what ails this game. The panel appears to be skirting the same issue. If the parties that be are in agreement, what the hell is the problem?

• Detection-Cheating the system would be easy to determine but difficult to punish.
• Nature-No negative incentive exists for transgressors. Unless the punishment for breaking away is severe and enforceable, it has no credibility.
• Certainty-Members must believe that transgressors will receive punishment.
• Clarity-I know of (and this is not saying much) no guideline as to what the structure would be. If nobody is presented with a blueprint and cannot see the destination, it becomes much easier to object.
• Proportion-Punishment must be proportional to the degree of offense.
• Periodicity-Is the nature of the relationship repeatable? Is there an expectancy of commitment? What are the expectations for growth over time? If everyone believes the ship is sinking, then everyone is only going to look out for their own best interest. If the train is going somewhere then parties will be less inclined to jump off (Three guesses as to what the parties think is happening to the game).
• Stability-What are the barriers to entry? If membership is fluid and casual then there are fewer incentives to adhere to the agreements. New members with no stake in the game are less likely to abide by its covenants. When the participating parties have more flesh in the game, the incentives to cooperate, all else being equal, increase.

The hardest part is starting. The expectation that what is created must be perfect, is as illogical as it is impractical. There is no silver bullet. This is not about threading the needle. When your house is on fire, you don't haggle with your neighbor about the price of his hose and you don't sue his ass when he breaks your arm after tackling you out from under a falling beam.

Somewhere in the paper, Alex Waldrop says something along the lines of politics being the art of the possible. I will do him one better. Max Weber said, 'Politics is a strong and slow boring of hard boards.'

Alex Waldrop limits himself by the scope of his premise. The tragedy lies not in his commitment to the effort but in his abeyant ideology of what that effort is.