Your lackey proposes as follows: “I move that we vote upon the following: that if this motion passes unanimously, all members of the of the Board resign immediately and are given a reasonable compensation; that if this motion passes 4-1 that the Director who voted against it must retire without compensation, and the four directors who voted in favor may stay on the Board; and that if the motion passes 3-2, then the two ‘no’ voters get no compensation and the three ‘yes’ voters may remain on the board and will also get a spectacular prize—to wit, our company’s 51% share in your company divided up evenly among them.”
Considering the reasoning that ends in “everyone is kicked off the board,” wouldn’t they all talk about it for a few minutes and then reject the proposal 4-1 (or maybe 3-2)?
This seems much like the Prisoners’ Dilemma. Yes, you can avoid it easily if you can talk beforehand and trust everyone to go through with their precommitments. If you can’t talk or you don’t trust what they say, then it’s much harder to avoid. After all, if the first two directors cooperated with the plan by voting no, then the second two directors would have a very high incentive to defect and vote yes.
In practice people are usually able to solve these for much the same reasons they can usually solve prisoners’ dilemmas—things like altruism and reputational penalties.
What occurred to me when I read it is “Why is this guy allowed to propose a motion which changes its actions based on how many people voted in favor of, or against, it?” While it’s likely the company’s bylaws don’t specifically prohibit it, I’m not sure what a lawyer would make of it, and even if it worked, I don’t think these sort of meta-motions would remain viable for long.
I suspect the other members of the board would either sign a contract with each other, (gaining their own certainty of precommitment,) or refuse to acknowledge it on the grounds that it isn’t serious.
Even without a precommitment etc., there isn’t direct incentive to be the first or second “yes” vote, only the third. If you had two shills on the board, it’s a much stronger scenario.
But since there’s such a strong incentive to be the third, if you are the second-most-senior-director and know that all the directors are strawmen-rational-actors, you can be pretty confident that if you vote yes, the most-senior-director will also vote yes.
Of course, it all gets into careful opponent analysis then, which makes the whole exercise quite fuzzy and into “well, Tom really hates the new guy, so he’ll probably vote no because he’s ornery” territory. All the directors are basing their decisions on the decisions of each other, since there is no reward for acting alone. Again, a second confederate in the beginning makes all the difference.
It seems to me the best option is to pass the proposal 3-2. Take 66% of the company’s 51% share to regain board appointments, re-appoint the two who had to resign, and then kick off the lackey and get somebody else. They’re buying back 34% of their shares for free.
Agreed. Pretty sure even if the other board members didn’t see the exact nature of the trap, they’d still find it obvious that it is a trap, especially considering the source.
Considering the reasoning that ends in “everyone is kicked off the board,” wouldn’t they all talk about it for a few minutes and then reject the proposal 4-1 (or maybe 3-2)?
This seems much like the Prisoners’ Dilemma. Yes, you can avoid it easily if you can talk beforehand and trust everyone to go through with their precommitments. If you can’t talk or you don’t trust what they say, then it’s much harder to avoid. After all, if the first two directors cooperated with the plan by voting no, then the second two directors would have a very high incentive to defect and vote yes.
In practice people are usually able to solve these for much the same reasons they can usually solve prisoners’ dilemmas—things like altruism and reputational penalties.
What occurred to me when I read it is “Why is this guy allowed to propose a motion which changes its actions based on how many people voted in favor of, or against, it?” While it’s likely the company’s bylaws don’t specifically prohibit it, I’m not sure what a lawyer would make of it, and even if it worked, I don’t think these sort of meta-motions would remain viable for long. I suspect the other members of the board would either sign a contract with each other, (gaining their own certainty of precommitment,) or refuse to acknowledge it on the grounds that it isn’t serious.
What do you mean by “serious”?
Even without a precommitment etc., there isn’t direct incentive to be the first or second “yes” vote, only the third. If you had two shills on the board, it’s a much stronger scenario.
But since there’s such a strong incentive to be the third, if you are the second-most-senior-director and know that all the directors are strawmen-rational-actors, you can be pretty confident that if you vote yes, the most-senior-director will also vote yes.
Of course, it all gets into careful opponent analysis then, which makes the whole exercise quite fuzzy and into “well, Tom really hates the new guy, so he’ll probably vote no because he’s ornery” territory. All the directors are basing their decisions on the decisions of each other, since there is no reward for acting alone. Again, a second confederate in the beginning makes all the difference.
It seems to me the best option is to pass the proposal 3-2. Take 66% of the company’s 51% share to regain board appointments, re-appoint the two who had to resign, and then kick off the lackey and get somebody else. They’re buying back 34% of their shares for free.
Agreed. Pretty sure even if the other board members didn’t see the exact nature of the trap, they’d still find it obvious that it is a trap, especially considering the source.