Sunday, January 9, 2011

The Prisoner's Dilemma

A lecture and in part a diatribe against self-sacrifice

The classical economic quandary, the basis also for Game Theory. It is through this simple setup that we see how rational, that is self-promoting, behavior leads to irrational (uneconomic) end states. Some (in my opinion morons) would take this as a case against self-motivated behavior and argue who the prisoners should sacrifice themselves for one another and only then will they be able to solve this whole thing. Such ideas are infantile and, at their very core, self contradictory. (I'd tone it down if I were actually giving this lecture, which I would love to. Right now it's caricaturing that which it is criticising)

The Dilemma

The prisoner's dilemma, for those who don't know, is a simple enough premise;
Two prisoners are both suspected of the same crime. There are two potential options for each prisoner: confess that they committed the crime or accuse the other. They cannot talk to one another. The sentencing for the four possible outcomes is as follows:
Both confess: 1 year each
1 confess/1 blame: 5 years to the confessor, 0 for the blamer
Both blame: 3 years each

The economic maximum (greatest total profits, in this case, fewest total years served by all parties) is reached in the situation where both prisoners confess. However, if any of you have seen A Beautiful Mind, you may recall the scene with at the bar with the women and them all exploding. This scene is attempting to depict the realization of what is known as Nash's Equilibrium (named after John Nash). According to Nash's Equilibrium, each party will act in such a way that it will yield the least profitable outcome (blame/blame). This is explained by the fact that, no matter what, if you blame the other person, you receive less personal punishment. (If they confess and you blame, 0 is better than 1 and if they blame and you blame, 3 is better than 5)

Now, this idea could be (and probably has been) picked up by those who are at war with personal maximization, the Collectivists, to use Rand's term. It is evidence that non-group oriented selfishness is a plague. You should always serve your brother by confessing and when each of us realizes this, only then will our utopia be reached. This is all well and good, but we as rational (read cynical, as per its definition: a person who believes that only selfishness motivates human actions and who disbelieves in or minimizes selfless acts or disinterested points of view) people understand that people will always act as to maximize themselves. Our task, if that be our line of reasoning, would be to change the behavior of another to better suit ourselves. This is the most poisonous and hypocritical of faiths. We would seek to shame or coerce another through invocation of the group's benefit into a self destructive act that always benefits (converse to Nash's Equilibrium, you always get a lesser sentence if the other confesses) ourselves. Thus, this doctrine is, at its heart, a lie and the deepest poison.
But we, however, are good economists, and as such, will not rest as long as there is inefficiency such as this. How do we propose to accomplish this? Simple Alchemy (simple, not easy): we become the person to whom jail time contrasted to 'freedom' is irrelevant. To become this person, external freedom must become nothing. For this, we need True Freedom.

(As an aside, we, as a religious species, have a tendency to seek a 'messiah;' another who will take our sentence while we reap the benefits. We pray and wait for this being when the path lies before us. We all wait for the messiah instead of becoming he who is free. See, as far as our understanding is concerned, everyone benefits from the messiah except the messiah. This is absurd in the eyes of the understanding.) (If I were actually giving this lecture, I would go more in depth into this and probably rearrange this whole thing).

True freedom is the freedom is the realization that it is the self, the I, which determines good and bad, want and abhor. The I is, in part, gained through the realization and acceptance that voluntary action is motivated by self interest and that it is the self which determines what it is interested in.

TBC...

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