Game Theory - 20100125

The application of game theory could never be under-estimated in our daily life. Everyone could be trapped easily in the losing end.

The classic Prisoner's Dilemma demonstrates how game theory works. Two suspects, A and B, are being investigated by the police. If either one betrays the other while the remaining one stays silent, betrayer would be acquitted and the one who eats the humble pie would get a 10-year sentence. If both of them zip their mouths up, they would only get milder sentence for trivial charge, say 6 months. If both of them attack each others, 5 years imprisonment are awaiting for the two accomplices. Thus, ideally, silence would be the best option for them to choose together. However, selfishness and distrust don't allow us to do so.

One of real life situation is like this. Dozen of colleagues attend a meeting together. The meeting ends at 3:30pm, whilst the official off hour should be 5:45pm. The travelling time between office and the meeting venue is 45 minutes. As such, legally speaking, colleagues should get back to office and resume working in their respective cubicles at 4:15pm. However, if the meeting is to be attended by merely one person, no other colleagues know the meeting finish time, this person would naturally set himself free at 3:30pm, without one second of hesitation.

Game theory chips in when the number of participants increases. When more people know the truth, everybody suspects against one and other, everyone is afraid to be betrayed and thus, nobody is willing to take the risk for enjoyment of the early day off. At the end of the day, all suffer.