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Extract from “Rock, Paper, Scissors: Game Theory in Everyday Life” introduction

Michael Leunig cartoon

A FRIEND CALLED ME RECENTLY with the news that a group of scientists had just published a study on how teaspoons gradually disappear from the communal areas of offices. “Game theory!” he screamed triumphantly. I thanked him profusely, and added yet another example to my already thick file.

Game theory is all around us. Despite its name, it is not just about games–it is about the strategies that we use every day in our interactions with other people. My friends have been sending me examples from newspaper stories and their own personal experience ever since I announced my intention to write a book about it. I wanted to find out whether its surprising new insights could help us develop fresh strategies for cooperation, and to try them out for myself in environments that ranged from the polite confines of an English dinner party to baseball games, crowded sidewalks, shopping centers, congested Indian roads, and Australian outback pubs.

Game theory tells us what is going on behind the confrontations, broken promises, and just plain cheating that we so often see in domestic quarrels, neighborhood arguments, industrial disputes, and celebrity divorce cases. It also gives guidance to the best strategies to use in situations of competition and conflict, which is why big business and the military have taken to it like ducks to water since it was invented in the late 1940s. It provides businessmen with strategies to get the better of their competitors and guides Western military thinking to an alarming extent. Professional game theorists have often had a foot in both camps. To give just one example, all five game theorists who have won Nobel Prizes in economics have been employed as advisors to the Pentagon at some stage in their careers.

But there is another side to game theory—a side that concerns cooperation rather than confrontation, collaboration rather than competition. Biologists have used it to help understand how cooperation evolves in nature in the face of “survival of the fittest.” Sociologists, psychologists, and political scientists are using it to understand why we have such problems in cooperating, despite the fact that we need cooperation as never before if we are to resolve important and worrying problems like global warming, resource depletion, pollution, terrorism, and war. I wanted to see whether it could be used in everyday situations and to find out whether the lessons learned might be helpful in resolving larger-scale problems. At the least, I thought, I might discover some clues as to how we as individuals could help to resolve such problems.

Game theorists have discovered an amazing link between all of these problems—a hidden barrier to cooperation that threatens to produce untold damage unless we learn to do something about it, fast. The barrier presents us with a catch–22 logical trap that is a constant, if often unrecognized, presence in family arguments, neighborhood disputes, and day-to-day social interactions, as well as in the global issues that we now face. It even accounts for the way that spoons mysteriously disappear from the communal areas of offices.

The scientists who studied the problem, who were otherwise perfectly sane and respectable Australian medical epidemiologists, had a lot of fun dreaming up unlikely explanations. One was that the spoons had escaped to a planet entirely populated by spoon life forms, there to live an idyllic existence in which they were not being dunked head-down in cups of hot tea or coffee. Another was resistentialism—the belief that inanimate objects have a natural antipathy toward humans and are forever trying to frustrate us, in this case by hiding when they are most wanted, in the manner of single socks in a washing machine. The serious explanation, though, was that this was an example of the Tragedy of the Commons—a scenario that was brought to public attention by the Californian ecologist and game theorist Garrett Hardin in a 1968 essay, although philosophers have been worrying about it since the time of Aristotle. Hardin illustrated it with the parable of a group of herders each grazing his own animals on common land, with one herder thinking about adding an extra animal to his herd. An extra animal will yield a tidy profit, and the overall grazing capacity of the land will only be slightly diminished, so it seems perfectly logical for the herder to add an extra animal. The tragedy comes when all the other herders think the same way. They all add extra animals, the land becomes overgrazed, and soon there is no pasture left.

The scientists applied the same argument to teaspoons: “teaspoon users (consciously or otherwise) make decisions that their own utility [i.e., the benefit to themselves] is improved by removing a teaspoon for personal use, whereas everyone else’s utility is reduced by only a fraction per head (“after all, there are plenty more spoons…”). As more and more teaspoon users make the same decision, the teaspoon commons is eventually destroyed.”

It sounds funny when applied to teaspoons, but if you replace the word teaspoon with land, oil, fish, forest, or the name of any other common resource, you will soon see that some very serious global problems have their origins in this vicious circle of logic, which can make its unwelcome presence felt whenever profit goes to an individual person or group of people but costs are shared by the community as a whole.

The Tragedy of the Commons exerts its destructive power whenever some of us cooperate for mutual benefit but others see that they could do better for themselves by breaking the cooperation (in game theory parlance, defection or cheating). So they can, until everyone else starts thinking in the same way, when the cooperation collapses and everyone ends up worse off. Through following the logic of self-interest, they have somehow landed everyone in a position where self-interest is the last thing that is being served.

This intractable logical paradox links the collapse of the Newfoundland cod fisheries, the ruinous civil war in the Sudan, China’s massive expansion in fossil fuel–driven power stations, and the tendency of many Americans to drive wasteful gas-guzzling cars. It underlies spam on the Internet, burglary, cutting in line, and many traffic accidents. It was probably the logic that led to the felling of the last tree on Easter Island. It is certainly the logic that leads people to dump their household waste on a vacant block instead of disposing of it properly, and to exaggerate insurance claims or “forget” to declare income on tax forms. It is also the logic that governments use when they refuse to sign international agreements like the Kyoto Protocol. Most importantly, it is the logic of escalation. In the words of the great 1970s protest song:

Everybody’s crying peace on earth,Just as soon as we win this war.

When both sides use the same logic, however, there is never going to be any peace in this world…

The trap [that underlies all of these problems] has been with us since time immemorial. Examples can be found in the Bible, the Koran, and many ancient texts, as well as in history books, the plots of novels and operas, and many modern news stories. Its true nature was not understood until the late 1940s, though, when the advent of game theory permitted the Nobel Prize–winning mathematician John Nash (the schizophrenic antihero of the film A Beautiful Mind) to reveal its inner workings.

Those inner workings are the central theme of this book. They catch us in a series of social dilemmas to which game theorists have given evocative names. One is the Tragedy of the Commons. Another is the famous Prisoner’s Dilemma, which is exemplified by the U.S. practice of plea bargaining, and which is the subject of chapter 1. Others are the game of Chicken (which nearly led to world catastrophe when Kennedy and Khrushchev played it during the Cuban missile crisis), the Volunteer’s Dilemma (encapsulated by the word mamihlapinatapai, of the Yagán language of Tierra del Fuego, which means “looking at each other with each hoping that the other will do something that you both want to have done but which neither of you wants to do themselves”) and the Battle of the Sexes (in which a couple wants to go out together rather than separately, but he wants to go to a baseball game while she wants to go to the opera). Cooperation would lead to the best overall outcome in all of these cases, but Nash’s trap (which is now called a Nash equilibrium) draws us by the logic of our own self-interest into a situation in which at least one of the parties fares worse but from which they can’t escape without faring worse still. If we are to learn to cooperate more effectively, we need to find ways to avoid or escape from the trap.

Game theory identified the problem. Can game theory provide any clues that might help us to resolve it? The answer is yes. Some of those clues have come from studies of the evolution of cooperation in nature. Others have come from a close examination of the strategies that we have traditionally used in our efforts to win and maintain cooperation. Promising strategies for cooperation that have emerged include variations on the I Cut and You Choose theme, new methods of cooperative bargaining (including an amazing application of quantum mechanics), eliciting trust by ostentatiously limiting your own options to cheat or defect, and changing the reward structure to remove the temptation to break cooperative agreements…

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