I’ve been thinking a lot lately about collaboration and Game Theory. More specifically I’ve been examining and re-examining the Prisoner’s Dilemma in hopes of learning more about how transparency affects collaboration, and I think I may be on to something.
Primer
Game theory attempts to mathematically capture behaviour in strategic situations (games). The prisoner’s dilemma is a fundamental problem in game theory and demonstrates why two people might not cooperate even if it is in their best interest to do so.
From Wikipedia:
Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated the prisoners, visit each of them to offer the same deal. If one testifies for the prosecution against the other (defects) and the other remains silent (cooperates), the defector goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?
… In this game, as in most game theory, the only concern of each individual player (prisoner) is maximizing his or her own payoff, without any concern for the other player’s payoff. The unique equilibrium for this game is a Pareto-suboptimal solution, that is, rational choice leads the two players to both play defect, even though each player’s individual reward would be greater if they both played cooperatively.
In the classic form of this game, cooperating is strictly dominated by defecting, so that the only possible equilibrium for the game is for all players to defect. No matter what the other player does, one player will always gain a greater payoff by playing defect. Since in any situation playing defect is more beneficial than cooperating, all rational players will play defect, all things being equal…
The classical prisoner’s dilemma can be summarized thus (click to enlarge):
The Collaboration Payoff Matrix
If we mash up the payoff matrix above to focus on collaboration between two parties (as opposed to prisoners) and apply it to time spent working on a project (as opposed to jail time) it would look something like this (click to enlarge):
The New Dilemma
At the heart of the prisoner’s dilemma is the inability of the prisoners to communicate with one another. It makes information sharing difficult and verification impossible. The uncertainty creates tension which in turn creates incentives for defection. If the two parties could simply bridge the physical distance between them, they could communicate, share information, be assured that the other party is keeping their word and collectively achieve the optimum outcome (no jail time).
Similarly, at the heart of the collaborator’s dilemma is an inability to communicate with one another. However, would-be collaborators aren’t dealing with physical distance imposed on them by police interrogators but rather geographical distance, language barriers, organizational boundaries, information asymmetry and an opacity that generally defines the culture of bureaucracy. The result is often the same, opacity-creating tension, in turn creating incentives for free-loading (defection) as neither side can verify the actions of or the information put forward by the other. If bureaucrats can bridge the information divide between them they could have more confidence in the system as a whole and would be more likely to collectively achieve the optimum outcome (faster production) and perhaps start to more effectively undermine the longstanding culture of knowledge as power.
Defection or in this case, free-loading, becomes next to impossible in a system where people can’t hide in the shadows, where information can’t be hived off for personal gain, or where strategic relationships can’t be easily exploited. Transparency just may be the answer to many of our organization’s problems; it may also create new ones. But all in all, what I find fascinating is that as our public institutions open up, the systematic pressure towards sub-optimal outcomes (defection) seemingly decreases. This creates room for new incentives to start to take root, and I think we are all in agreement that we could use some new incentives.
Still Work to Do
The trouble is that we aren’t there yet, we are still a system in transition, which means that would-be collaborators can be easily taken advantage of by old school bureaucrats. The environment we find ourselves in is one where collaboration, especially in the face of traditional defectors, requires great courage. It requires even greater courage when those traditional defectors occupy higher positions than the would be collaborators within the hierarchy.
Do you have the courage it takes to collaborate or are you just another prisoner?
[Image credit: pasukaru76]
Great post. Part of the concept tied here that I’ve been focusing on is “when do we punish non-action?” In life, no decision is a decision. If you don’t decide to propose, your partner may get frustrated and leave. If you can’t decide to start your business, 5 years later the opportunity may have passed and there is lots of competition.
In large organizations, there is often very little penalty for non-action. How do we incentive towards action vs in-action? Incentivizing doing a good job and a speedy mechansim but perhaps breaking a few protocol VS taking two years and never getting anything out but following protocol
Steve – I often speak about the same thing. I talk about how there are often rewards for not making mistakes which usually means not taking action… which could sometimes be the biggest mistake of them all.
@Nicholas – You might be interested in Steven J. Brams’ Theory of Moves. It covers some of the issues of collaboration in game theory.
Thanks Bill. I’ll have a look. Cheers.