The prisoner’s dilemma refers to the strategy methodology where trust is required to achieve a win-win outcome. A simple summary is where two players each have the option to collaborate or defect. If both collaborate the combined reward is the highest. However, if one player collaborates and the other player defects, the defector receives a higher individual reward, while the collaborator misses out. Both players must make a decision without knowing what the other one will choose. A great example of this in action was played out on the BBC television show Golden Balls.
As discussed in “Why can’t we make decisions?” we have multiple departments all deciding whether to collaborate or to stick with their internal targets and metrics. Now instead of only two people having to say “yes” we need three, four or more to agree. But it only takes one “no” to stop any decision. It becomes easy to assume that getting everyone to agree will be difficult so why bother.
Robert Axelrod in his book, the Evolution of Cooperation, poses the question;
“Under what conditions will cooperation emerge in a world of egoists without central authority?”
In organisations the lack of central authority is because the reporting lines of the vertical silos don't come together until the CEO. For most decisions, the decision equilibrium point means that they don’t get that far.
Axelrod uses the Prisoner’s Dilemma to look at how cooperation occurs. For a single “prisoner’s dilemma” negotiation the best strategy is to defect because you can never tell what the other person is going to do. But in repeated negotiations where the “prisoner’s dilemma” is repeated over and over the best strategy is “tit or tat”. That is, I won’t defect until you defect first. If you then cooperate, I will cooperate. This approach emerges when the participants know that they will be interacting in the future and it is better to cooperate now if you know you will need help reciprocated in the future. An unusual example was the trench warfare in World War I where troops on both sides would attack each other when ordered but in-between time would apply the strategy, “tit for tat”. As quoted from Ian Hay’s book, The First Hundred Thousand;
“It would be child’s play to shell the road behind the enemy’s trenches, crowded as it must be with ration wagons and water carts, into a bloodstained wilderness… but on the whole there is silence. After all, if you prevent your enemy from drawing his rations, his remedy is simple: he will prevent you from drawing yours.”
Axelrod provides the following strategy advice in how to participate in a repeated negotiation scenario and how to promote cooperation.
Participating in repeated negotiations;
1. Don’t be envious.
2. Don’t be the first to defect.
3. Reciprocate both cooperation and defection.
4. Don’t be too clever.
To promote cooperation;
1. Enlarge the shadow of the future
2. Change the payoffs
3. Teach people to care about each other
4. Teach reciprocity
5. Improve recognition abilities