Friday, April 10, 2009 by Dave Blum

In yesterday’s blog, I discussed the “Free Rider Syndrome” and promised to  provide some instruction (from game theory) for encouraging collaboration and cooperation.”  Well, sorry to say–I’m not quite ready to submit my report.  To paraphrase the X-Files, “The answers are out there” — but, alas, they seem to be at the END of Len Fisher’s great book about game theory:  “Rock, Paper, Scissors”.  Unfortunately, I’m only 1/2-way through the work, so… I’ll ask your patience while I finish reading it over the weekend.

As a teaser, though, I want to present this sly little story from page 114 of Rock, Paper, Scissors–a story about coalition building:

Two children receive Xmas presents from their doting grandparents. One child gets a bicycle, the other a video game console.  Unfortunately, the grandparents mixed things up and gave the bicycle to the one who really wanted the video game machine, and vice versa.  The solution sounds easy, right:  swap the gifts.  The problem was that neither kid wanted to go first, arguing, “If I give up my present, he might just keep both.”  The kids fell into a common social dilemma because they didn’t trust each other.  You can imagine what happened — their parents threatened to take away both presents, forcing the kids to form a “temporary coalition”.

Fisher concludes that “in a world of selfish individuals this seems to be the main reason why we agree to form coalitions–because it is worth our while to do so, or because others make it worth our while.  The reward for joining may be an emotional one–the good feeling of belonging…or a practical one…or the the threat of what might happen if the person doesn’t join the coalition.”

What I’m looking forward to discovering (and sharing with you) is game theory’s advice for how to create lasting cooperation within a world of self interest.  From what I can tell, the key seems to be trust.    To be continued…