Wednesday, August 27, 2014

NEGOTIATION, THE CASE OF THE PRISONERS' DILEMMA AND THE POWER OF EFFECTIVE COMMUNICATION



THE CLASSIC CASE OF THE PRISONERS' DILEMMA

Ganavia and Gezlique have been arrested for robbing the Mamonia Savings Bank and placed in separate isolation cells. Both care much more about their personal freedom than about the welfare of their accomplice. A clever prosecutor makes the following offer to each. "You may choose to confess or remain silent. If you confess and your accomplice remains silent I will drop all charges against you and use your testimony to ensure that your accomplice does serious time. Likewise, if your accomplice confesses while you remain silent, they will go free while you do the time. If you both confess I get two convictions, but I'll see to it that you both get early parole. If you both remain silent, I'll have to settle for token sentences on firearms possession charges. If you wish to confess, you must leave a note with the jailer before my return tomorrow morning."

The "dilemma" faced by the prisoners is, that whatever the other does, each is better off confessing than remaining silent. But the outcome obtained when both confess is worse for each than the outcome they would have obtained had both remained silent.

This dilemma is created by the fact that neither prisoner can communicate with the other, and therefore there is no trust or strategy of collaboration. This leads to a sub-optimal outcome of both being convicted and sentenced to a long time in prison whereas had they been able to communicate, build trust and devise a strategy of collaboration they could have both received far lighter sentences.