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sugar
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PostPosted: Sun Sep 16, 2012 8:36 pm    Post subject: The prisioners' dilemma and the failure of the individual Reply with quote

So, you, and another, named Smith, are arrested for a crime you know nothing about. There is no contact between the two of you, and you presented with the option to confess or stay silent. The authorities tell you that if one of you confesses, but the other doesn't, the person who confesses will be let free for co-operating, and the other will go to jail for 10 years. If you both confess, you will get 5 years each, and if neither confess, they will hold you for a year, but after that, they will have to let you go.

You are also told that Smith is offered the same deal.

The answer is, you must confess. If Smith also confesses, you end up with only 5 years in jail, instead of a possible 10 years. If Smith does not confess, then you go free, instead of being held in custody for a year. For you sake, the best solution is to act selfishly.

Unfortunately, Smith also have the same dilemma, and can only come to the same conclusion. Since both of you acted selfishly, you both ended up worse off. However, if you were both able to communicate and cooperate with each other, you could have only have made it 1 year. It's not the optimal result, but it's better than if you have acted selfishly.

...........................

So, in life, we have the option of acting selfishly (i.e. do whatever to benefit yourself, take no notice of anyone else) or acting benevolently (i.e. concern with other's welfare, balancing your own interests with the interests of others, occasionally forgoing your own interests for the interests of others etc). Of course, everyone else has this same option. So, there are 4 outcomes.

1. you could be selfish while everyone else could be benevolent,
2. you could be benevolent while everyone else is selfish,
3. everyone could be benevolent
4. everyone could be selfish.

It's similar to the situation that the prisoners' faced in the above scenario. The best situation for yourself is to act selfishly. If everyone else is selfish, then, well, it's a bad situation but it's not the worst (you will be able to protect your own interests, but not get any help from others), but if everyone else is benevolent while you are selfish, then you get 'the benefit of their generosity without having to return the favour'. The second best outcome would be if everyone was benevolent (you would at least be well treated by others). The worst outcome is if you are benevolent, and everyone else is selfish, the sucker's payoff.

The catch is, again, that because everyone has the same choice, it will end up that everyone will be selfish to protect their own interests, because that's the best average outcome, but everyone misses out on the benefit that come from co-operation with each other.

In order the escape the dilemma, we should enforce a set of rules to create a situation of mutually respectful social living. This will not lead to the optimum result, but will at least lead to a better result that as if we had independently pursued our own interests.
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PostPosted: Wed Sep 19, 2012 5:51 am    Post subject: Reply with quote

Alright, since it's a little quiet here, I'll start.

sugar, pretending to be someone else, wrote:
This theory of a social contract supports self interest and reciprocity. Does this mean that those that do not participate in the social contract (i.e. future generations, opressesed populations, animals etc) can be treated negatively, and the social contract is not broken?


Well, I guess so! Good point!
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PostPosted: Wed Sep 19, 2012 6:01 am    Post subject: Reply with quote

I question the applicability of this academic scenario to real life.
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PostPosted: Wed Sep 19, 2012 6:33 am    Post subject: Re: The prisioners' dilemma and the failure of the individua Reply with quote

sugar wrote:
1. you could be selfish while everyone else could be benevolent,
2. you could be benevolent while everyone else is selfish,
3. everyone could be benevolent
4. everyone could be selfish.


I pick choice #9 which states that I may or may not correctly interpret events as being beneficial to myself or others except on Tuesdays at around 11:30pm Pacific time.
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PostPosted: Wed Sep 19, 2012 7:04 am    Post subject: Re: The prisioners' dilemma and the failure of the individua Reply with quote

sugar wrote:

In order the escape the dilemma, we should enforce a set of rules to create a situation of mutually respectful social living. This will not lead to the optimum result, but will at least lead to a better result that as if we had independently pursued our own interests.


I suppose the "we" in that means people who understand neither economics nor game theory.
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PostPosted: Wed Sep 19, 2012 7:49 am    Post subject: Re: The prisioners' dilemma and the failure of the individua Reply with quote

sugar wrote:
the best solution is to act selfishly

No - act properly, and if the other side acts badly, get revenge after the 10 years.
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PostPosted: Wed Sep 19, 2012 9:19 am    Post subject: Reply with quote

Phil 101.

This is also known as a false dichotomy.
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PostPosted: Wed Sep 19, 2012 5:34 pm    Post subject: Reply with quote

wswartzendruber wrote:
I question the applicability of this academic scenario to real life.

++
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PostPosted: Wed Sep 19, 2012 5:35 pm    Post subject: Re: The prisioners' dilemma and the failure of the individua Reply with quote

Darth Marley wrote:
I suppose the "we" in that means people who understand neither economics nor game theory.

++
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PostPosted: Wed Sep 19, 2012 5:36 pm    Post subject: Reply with quote

Muso wrote:
false dichotomy

++
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PostPosted: Wed Sep 19, 2012 6:10 pm    Post subject: Reply with quote

Muso wrote:
Phil 101.

This is also known as a false dichotomy.


it's a dichotomy of either co-operation or defection.
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PostPosted: Wed Sep 19, 2012 6:18 pm    Post subject: Reply with quote

PaulBredbury++
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PostPosted: Wed Sep 19, 2012 6:20 pm    Post subject: Reply with quote

wswartzendruber wrote:
I question the applicability of this academic scenario to real life.


Let's apply this to the problem of civil disobedience, from an ethical perspective.

Using the concept above, the idea of a social contract exists because we gain certain benefits (i.e. the benefits of social living) in return for certain burdens. Social groups that are segregated or socially disenfranchised, therefore, do not gain the benefits of social living. This means that it's ethical and reasonable for them to perform civil disobedience, as this is a natural expression of someone who has been released from the social contract, and no longer abide by societies rules.

So, now, if someone says 'these here minorities shouldn't be breaking the law', you can present a clear and reasoned perspective, going from game theory -> social contract theory -> the justification of civil disobedience.
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PostPosted: Thu Sep 20, 2012 1:21 am    Post subject: Re: The prisioners' dilemma and the failure of the individua Reply with quote

PaulBredbury wrote:
No - act properly, and if the other side acts badly, get revenge after the 10 years.

Meh. Pretty underwhelming, actually. Here's something truly horrifying.
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PostPosted: Thu Sep 20, 2012 12:52 pm    Post subject: Reply with quote

you clearly have no knowledge, training, or experience in game theory.

prisoner's dilemma is used for many AI competitions. the most winning strategy is called tit-for-tat. basically, i do to you what you did to me last turn. you defected? now i'll defect. you cooperated? now i'll cooperate. there are some variants that try to get an edge if they know that there will only be X trials (because they can defect on the Xth trial and still win). if there is only a single trial in between participants, then it goes to math based on how many points each action is worth. you're making a ton of sweeping generalizations without knowing any of the basics of the math. stop. you're just wrong.

but more importantly, prisoner's dilemma includes multiple assumptions that more often than not, don't apply to economic and social policy. for example, it assumes that participants cannot communicate and negotiate. back here in the real world, economic and societal participants can virtually always communicate and negotiate. individuals and companies make deals with other individuals and companies hundreds and even thousands and trillions of times a day. shit, even cars have turn signals.

most importantly, game theory is used to win your way to the top of competitions. what game theorists have found is that even when the right answer is staring people in the face, and even when they're told what the answer is, and directly incentivized to take the right answer, many people will still pick the wrong answer. you're making the false assumption that people will make the optimum decision at all times. the obama administration started a research group that used behavioral psychology, game theory and data science to back a bunch of policies, only to find that most people act completely irrational most of the time.

stop trolling with your psuedo-ivory tower nonsense. you're not even in the door yet and you're soap boxing.
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PostPosted: Thu Sep 20, 2012 3:37 pm    Post subject: Reply with quote

big dave wrote:
only to find that most people act completely irrational most of the time.


Here is a nice documentary about mathemathics, chaos and anxiety:

http://topdocumentaryfilms.com/high-anxieties-the-mathematics-of-chaos/
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PostPosted: Fri Sep 21, 2012 12:40 am    Post subject: Reply with quote

big dave wrote:
but more importantly, prisoner's dilemma includes multiple assumptions that more often than not, don't apply to economic and social policy. for example, it assumes that participants cannot communicate and negotiate.


hmmm. good point. Except, you might want to read the original post before you knee jerk.

big dave wrote:
most importantly, game theory is used to win your way to the top of competitions. what game theorists have found is that even when the right answer is staring people in the face, and even when they're told what the answer is, and directly incentivized to take the right answer, many people will still pick the wrong answer. you're making the false assumption that people will make the optimum decision at all times. the obama administration started a research group that used behavioral psychology, game theory and data science to back a bunch of policies, only to find that most people act completely irrational most of the time.

stop trolling with your psuedo-ivory tower nonsense. you're not even in the door yet and you're soap boxing.


nice way to cap a post with an insult at the end! oh, nice burn! Ouch!

Well done taking a post-modern perspective. You'll find, however, that the vast vast majority of people DO live under an implicit social contract. Whether or not they understand the reasons why they do is another story. There are practicial (i.e. the original appropriation problem you struggled with earlier), and the pragmatic (game theory, which also supports Hobbes own philosophical arguments).

What I need now is a nice burn to burn you back with!
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PostPosted: Fri Sep 21, 2012 12:50 am    Post subject: Reply with quote

big dave wrote:
stop trolling with your psuedo-ivory tower nonsense. you're not even in the door yet and you're soap boxing.
Please stop posting insults and personal attacks.
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PostPosted: Fri Sep 21, 2012 1:48 am    Post subject: Reply with quote

sugar wrote:
Muso wrote:
Phil 101.

This is also known as a false dichotomy.


it's a dichotomy of either co-operation or defection.

Yes, but you are proposing this as a model of society. Society is not that simple. Human collaboration and competition occur on multiple levels simultaneously, coexist simultaneously, and occur to varying degrees (are not boolean 'on' or 'off' variables).

Such game-theory models are more typically applied to very isolated circumstances (e.g., modeling a single purchase decision or a single resource allocation decision).

You are in good company, though; far more educated and important people have also tried to pull this sophomoric, pseudo-intellectual stunt, and there are plenty of suckers who will just drool, wide-eyed, and mutter "Yeah. Teh Scyents...".
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PostPosted: Fri Sep 21, 2012 2:08 am    Post subject: Reply with quote

wswartzendruber wrote:
I question the applicability of this academic scenario to real life.


Another

Quote:
The prisoners’ dilemma has applications to economics and business. Consider two firms, say Coca-Cola and Pepsi, selling similar products. Each must decide on a pricing strategy. They best exploit their joint market power when both charge a high price; each makes a profit of ten million dollars per month. If one sets a competitive low price, it wins a lot of customers away from the rival. Suppose its profit rises to twelve million dollars, and that of the rival falls to seven million. If both set low prices, the profit of each is nine million dollars. Here, the low-price strategy is akin to the prisoner’s confession, and the high-price akin to keeping silent. Call the former cheating, and the latter cooperation. Then cheating is each firm’s dominant strategy, but the result when both “cheat” is worse for each than that of both cooperating.


http://www.econlib.org/library/Enc/PrisonersDilemma.html
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PostPosted: Fri Sep 21, 2012 3:03 am    Post subject: Reply with quote

sugar wrote:
wswartzendruber wrote:
I question the applicability of this academic scenario to real life.


Another

Quote:
The prisoners’ dilemma has applications to economics and business. Consider two firms, say Coca-Cola and Pepsi, selling similar products. Each must decide on a pricing strategy. They best exploit their joint market power when both charge a high price; each makes a profit of ten million dollars per month. If one sets a competitive low price, it wins a lot of customers away from the rival. Suppose its profit rises to twelve million dollars, and that of the rival falls to seven million. If both set low prices, the profit of each is nine million dollars. Here, the low-price strategy is akin to the prisoner’s confession, and the high-price akin to keeping silent. Call the former cheating, and the latter cooperation. Then cheating is each firm’s dominant strategy, but the result when both “cheat” is worse for each than that of both cooperating.


http://www.econlib.org/library/Enc/PrisonersDilemma.html

Like I said:
Quote:
Such game-theory models are more typically applied to very isolated circumstances (e.g., modeling a single purchase decision or a single resource allocation decision).
Quote:
Society is not that simple. Human collaboration and competition occur on multiple levels simultaneously, coexist simultaneously, and occur to varying degrees (are not boolean 'on' or 'off' variables).

From your example above, we can conclude "Thus is the motivation for price-fixing in scenarios of oligopolistic competition! The state must guard against price-fixing!" But, what you're trying to do is to say, "Q.E.D. everyone should get a free weekly ration of Victory Cola!" It does not follow, because the model is grossly inadequate.
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PostPosted: Fri Sep 21, 2012 4:11 am    Post subject: Reply with quote

BoneKracker wrote:
Like I said:
Quote:
Society is not that simple. Human collaboration and competition occur on multiple levels simultaneously, coexist simultaneously, and occur to varying degrees (are not boolean 'on' or 'off' variables).


In the same way that 'the market' is abstracted when discussing the voluntary exchange between individuals for each other's benefit, the prisoners' dilemma used to abstract the ethical rules that dictate social interactions, and how these rules create an implicit social contract.
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PostPosted: Fri Sep 21, 2012 4:31 am    Post subject: Reply with quote

Okay, and I have with similar utility abstracted you to to this (between the arrows):
-----> . <------

Hmm. I can't hear anything coming from there. Q.E.D., you have nothing more to say.

Just because a model is a model, that does not make it a good model for any particular, and especially for all, purposes.
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PostPosted: Fri Sep 21, 2012 9:41 am    Post subject: Reply with quote

sugar wrote:
wswartzendruber wrote:
I question the applicability of this academic scenario to real life.


Another

Quote:
The prisoners’ dilemma has applications to economics and business. Consider two firms, say Coca-Cola and Pepsi, selling similar products. Each must decide on a pricing strategy. They best exploit their joint market power when both charge a high price; each makes a profit of ten million dollars per month. If one sets a competitive low price, it wins a lot of customers away from the rival. Suppose its profit rises to twelve million dollars, and that of the rival falls to seven million. If both set low prices, the profit of each is nine million dollars. Here, the low-price strategy is akin to the prisoner’s confession, and the high-price akin to keeping silent. Call the former cheating, and the latter cooperation. Then cheating is each firm’s dominant strategy, but the result when both “cheat” is worse for each than that of both cooperating.


http://www.econlib.org/library/Enc/PrisonersDilemma.html

coke and pepsi pricing isn't analogous because unlike in the prisoner's dilemma, they can not only communicate with each other but they can see what the other is doing and react before the other's actions actually take effect. distributor contracts stabilize the price through various clauses. amusingly, you're promoting cooperation, but if they communicate in that cooperation, the government actually says that's illegal. it's called price fixing.

also, when someone says they question the real-world applicability of an academic thought experiment, you're not going to convince them by citing university professors...

but wait, there's more! the obama administration openly tried using behavioral economics (a combination of game theory, data science, and psychology) in multiple policies. he appointed many advisors who were well respected in the academic community. it was a dismal failure. orzhag and many other advisors on the team resigned. obama swept away any advisors who didn't resign. the reality is that even if they could make the model map reality, they still couldn't overcome the fact that people are not logical... most humans make very irrational decisions. many will even make irrational decisions that favor neither self nor societal interests. yes, when you have a competition, you'll find that the guys at the top usually used successful tactics from game theory. but a statistical random sample of all competitors in that field will show that most of them cannot or do no successfully apply game theory.
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PostPosted: Fri Sep 21, 2012 10:46 pm    Post subject: Reply with quote

big dave wrote:

coke and pepsi pricing isn't analogous because unlike in the prisoner's dilemma, they can not only communicate with each other but they can see what the other is doing and react before the other's actions actually take effect. distributor contracts stabilize the price through various clauses. amusingly, you're promoting cooperation, but if they communicate in that cooperation, the government actually says that's illegal. it's called price fixing.


the case talks about communication between parties. I feel embarrassed to have to point it out. This is why the last time I replied I suggested that you read the OP again.

Where there is communication between parties, then co-operation becomes a valid option, and this option becomes a better option for all parties than if they had just acted selfishly with no communication. However, parties do not need to communicate explicitly, but can see from market positioning their intentions. The point being, this helps to explain why you tend to get oligopolies, but it's rare that you get a monopoly, because there is a benefit in co-operating with your competition.

big dave wrote:
also, when someone says they question the real-world applicability of an academic thought experiment, you're not going to convince them by citing university professors...


http://yourlogicalfallacyis.com/genetic

*facepalm*

<insert sick insult/burn here>
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