I see your point. According to game theory you should cooperate( as I stated above). However, I will show what my thinking would be in reality...
If I cooperate, they could to, and if that happened we would at up at a payoff of 12,12. However, if they defect then I will loose points.
If I defect, I would have a chance of getting a payoff of 5,0 or a payoff of 2,2. This is the only way to get more than 12 points, and the only way to be give at least two points every time.
Then, you defect every time. If your oppponent also defects every time, you end up at the pareato boundry with a total payoff of 8,8.
No. In this case, game theory says that if both people are using the same logic and they know that, then what I showed above is correct: cooperating is the best choice. However, that is not always the case in reality.
In this case, game theory says that if both people are using the same logic and they know that, then what I showed above is correct
and
Is it ever the case in reality?
It seems so, yes. We don’t have absolutely certain frameworks, but we do have contracts that are enforceable by law, and we have strong trust-based networks.
It is worth pointing out that even in fairly sloppy situations, we can still use “if both people are using the same logic and they know that” rule of thumb. For example, I would never decide to carpool if I though that I could not trust the other person to be on time (but I might frequently be late if there was no cost to doing so). When all members of the carpool make this calculation, even a limited amount of evidence that we all agree that that this calculation makes it worth showing up on time is likely to keep the carpool going; that is, if it works well for two days and on the third day Bob shows up late but has a good excuse and is apologetic, we will probably be willing to pick Bob up on the fourth day.
[Edits; I have no clue how to separate two blocks of quoted text.] [Edit: figured it out].
How about according to reality?
And, by the way, what is the fate of theories which do not match reality? X-)
I see your point. According to game theory you should cooperate( as I stated above). However, I will show what my thinking would be in reality...
If I cooperate, they could to, and if that happened we would at up at a payoff of 12,12. However, if they defect then I will loose points.
If I defect, I would have a chance of getting a payoff of 5,0 or a payoff of 2,2. This is the only way to get more than 12 points, and the only way to be give at least two points every time.
Then, you defect every time. If your oppponent also defects every time, you end up at the pareato boundry with a total payoff of 8,8.
So is the game theory just wrong, then? :-)
No. In this case, game theory says that if both people are using the same logic and they know that, then what I showed above is correct: cooperating is the best choice. However, that is not always the case in reality.
Is it ever the case in reality?
and
It seems so, yes. We don’t have absolutely certain frameworks, but we do have contracts that are enforceable by law, and we have strong trust-based networks.
It is worth pointing out that even in fairly sloppy situations, we can still use “if both people are using the same logic and they know that” rule of thumb. For example, I would never decide to carpool if I though that I could not trust the other person to be on time (but I might frequently be late if there was no cost to doing so). When all members of the carpool make this calculation, even a limited amount of evidence that we all agree that that this calculation makes it worth showing up on time is likely to keep the carpool going; that is, if it works well for two days and on the third day Bob shows up late but has a good excuse and is apologetic, we will probably be willing to pick Bob up on the fourth day.
[Edits; I have no clue how to separate two blocks of quoted text.] [Edit: figured it out].