More from the Prisoner's Dilemma

As I mentioned in a previous posting, I have been reading Prisoner's Dilemma by William Poundstone.

The title refers to a famous game theory example. The situation is in fact a common one. Consider for example an exchange, in which two people can exchange goods, such that each gets something he prefers to that which he would five up. By cooperating in the exchange, each would benefit. However, if either one cheats taking the good of the other one without giving his in return, that one will benefit more than in the exchange while the other one will lose out. All too often, in such circumstances, distrust will keep the parties from entering into the exchange at all.

There are two simple ways out of the situation. One is an authority figure who will enforce the rules of the exchange. Thus an adult will enforce an exchange of toys between kids who can't play cooperatively. An escrow agent will allow a real estate transaction to take place between buyer and seller who would not otherwise trust each other.

The other simple way out of the situation is to negotiate and find a means of making the exchange which essentially guarantees each party that the exchange will work. Kids put their toys on the ground, and each moves to pick up the other kid's toy watching to assure the exchange is fair. In movies, prisoners are exchanged at a border by walking across a bridge between the opposing forces.

As Poundstone's book shows, the ideas of game theory can work out in international politics. The United Nations has served as an authority that allows settlements bringing peace to warring parties. The Soviet Union and the United States were able to negotiate verifiable agreements to allow arms control and disarmament.

But in order to achieve such desirable resolutions, it seems one can not both insist on unilateralism and also refuse to negotiate.