[Bill,
May 24, 2007]
Thinking too hard about it
In this story, a game theorists spends too much time thinking about the problem, and dismisses folks' choices as not being logical.
Here's the answer: People do what's best for themselves, and that doesn't necessarily mean beating someone else. If Harry were given $101 and I were given a choice of taking Harry's $101 away and keeping it for myself, or letting Harry keep his money and collect a separate $100 of my own, would it be illogical for me to let Harry keep his money while I got $100? Excuse me if I say it would be logical to allow Harry to get his. Even in a situation of pure self-interest, the most logical conclusion would be for me to let Harry keep his money. Why? Because we will both spend the money and thus stimulate economic activity, and the result is we'll both benefit more, in the long run, than if I kept the $101 for myself. Taking Harry's money is, frankly, corrupt Third World thinking, and illogical.
In the Travellers' Dilemma, the logical answer is to keep the response high, generating the maximum payout for both people, and avoid the trap of trying to get the highest possible payout for yourself only. Most people know the fables about those who've sought to wring the last dollar out of someone — it doesn't work. Better both of you do "well enough" and move on. [The Books of Proverbs counsels against "gleaning to the edge of your fields.]
However, if you raise the stakes and increase the penalty, I may play differently. Let's say Harry gets $1 billion. I can either take his billion, or collect 2 cents. In that case, I would logicaly take his billion, and share the money with him after the game. (I'm not saying it would be a 50-50 split.0
In other words, most people think in broad contexts, and take into account the relationship of the community, ways to achieve fairness and such.
Why? Because of Hobbes — we can all die a violent death at the hands of pretty much any three or four humans. It's important that we don't go around killing each other.
That is, there are variables that people take into account that are not accounted for in the game, namely, ongoing social and economic relationships.
Note: No actual Harrys were harmed in the creation of this post.
Note 2: There is one person I know who would follow the logic to its fullest — but he would do so as a joke.
Here's the answer: People do what's best for themselves, and that doesn't necessarily mean beating someone else. If Harry were given $101 and I were given a choice of taking Harry's $101 away and keeping it for myself, or letting Harry keep his money and collect a separate $100 of my own, would it be illogical for me to let Harry keep his money while I got $100? Excuse me if I say it would be logical to allow Harry to get his. Even in a situation of pure self-interest, the most logical conclusion would be for me to let Harry keep his money. Why? Because we will both spend the money and thus stimulate economic activity, and the result is we'll both benefit more, in the long run, than if I kept the $101 for myself. Taking Harry's money is, frankly, corrupt Third World thinking, and illogical.
In the Travellers' Dilemma, the logical answer is to keep the response high, generating the maximum payout for both people, and avoid the trap of trying to get the highest possible payout for yourself only. Most people know the fables about those who've sought to wring the last dollar out of someone — it doesn't work. Better both of you do "well enough" and move on. [The Books of Proverbs counsels against "gleaning to the edge of your fields.]
However, if you raise the stakes and increase the penalty, I may play differently. Let's say Harry gets $1 billion. I can either take his billion, or collect 2 cents. In that case, I would logicaly take his billion, and share the money with him after the game. (I'm not saying it would be a 50-50 split.0
In other words, most people think in broad contexts, and take into account the relationship of the community, ways to achieve fairness and such.
Why? Because of Hobbes — we can all die a violent death at the hands of pretty much any three or four humans. It's important that we don't go around killing each other.
That is, there are variables that people take into account that are not accounted for in the game, namely, ongoing social and economic relationships.
Note: No actual Harrys were harmed in the creation of this post.
Note 2: There is one person I know who would follow the logic to its fullest — but he would do so as a joke.