Wednesday, February 19, 2014

Its obvious if you think about it.


I just read an article that pointed out that the "tit for tat" negotiating strategy usually deteriorates into a death spiral if there is a noisy environment. Both parties can start out nice, but somewhere along the line, noise intervenes and a participant things the other is cheating -- taking advantage, doing the wrong thing. The response is negative, and so on. The better strategy is "generous tit for tat".
DeSteno points to the work of mathematicians Martin Nowak and Karl Sigmund, who have studied how such noise affects cooperative strategies. To their own surprise, the researchers found in a series of experience that tit-for-tat didn’t emerge as the ideal strategy. Instead, what dominated was a close cousin, which they called “generous tit-for-tat” (GTFT) — an approach somewhat more forgiving than TFT, in which people occasionally chose to cooperate even after their partner had defected. With this extra helping of forgiveness, they were able to overcome that system noise and continue to cooperate smoothly. The most striking finding, however, is that GTFT had a significant flaw — it resulted in a sort of habituation to defection, which over the long run provided fertile ground for exploitation by the dishonest.

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