Im just reading Thomas Schelling’s Theory of Conflict and one of his key tenets is that providing an identifiable point around which the discussion can be centered will tend to lead the discussion to be centered around that (classical anchoring). However, he brings out that in many cases, having a “line in the sand” brings benefits to all sides by allowing intermediate deals to be struck when only extremes were possible before.
This article, however, clearly demonstrates that having a line in the sand can be just as bad as it can be good, as it is with all of biases. However, I really recommend Schelling hit on “what is good” (in the evolutionary sense) about this phenomenon.
On the topic of “utilities in the prisoner dilemma coinciding with jailtime” I quote one of my guest blog posts: http://phd.kt.pri.ee/2009/01/27/the-real-prisoner-dilemma/
Two hardened criminals are taken to interrogation in separate cells. They are offered the usual deal: If neither confesses, both get one year probation. If both confess, both do 5 years in jail. If one confesses, he goes free but the other does 10 years hard time.
Here’s what actually goes through their minds: “Okay, if neither of us confesses, we have to go back to the real world. But its so hard there! But if I confess, he will kill me when he gets out.. so thats bad… If both of us confess, then we can just get back to jail and continue our lives!”
Lateral thinking, people ;)