Using Game Theory for Positive Outcomes

Game theory investigates the motives and dilemmas of social interactions relative to selfishness and cooperation. As we understand game theory we can increase our chances of finding satisfying resolutions by adopting new strategies or even by just having a clearer view of social dilemmas and their underlying causes. In his book on the subject, Rock Paper Scissors, Len Fisher gives the following ten tips:

  1. Keep the same strategy if you’re winning, shift strategies if you lose.
  2. Bring a third player in. They can be a known negotiator or a known cheater – either way it helps.
  3. Set up reciprocity. Knowing that you’ll deal with people after a conflict can increase the incentive to cooperate.
  4. Limit future options or provide incentives. This shows that you are committed to the best possible outcomes.
  5. Offer trust. It’s simple, but it can be effective.
  6. Create a situation from which neither party can escape from without loss.
  7. Use side-payments to maintain cooperation.
  8. Know the seven deadly dilemmas and avoid the worst outcomes:
    1. The Prisoner’s Dilemma – all must cooperate or all fail.
    2. The Tragedy of the Commons (a series of Prisoner’s Dilemmas) –self-interest prevents cooperation despite impending long-term failure.
    3. The Free Rider problem – people taking advantage of a community resource without contributing to it.
    4. Chicken/Brinkmanship – each side tries to push the other as close to the edge as they can, with each hoping that the other will back down first.
    5. The Volunteer’s Dilemma – someone must make a sacrifice on behalf of the group, but if no one does, then everyone loses out.
    6. The Battle of the Sexes – two people have different preferences, but each would rather share the other’s company than pursue their own preference alone.
    7. Stag Hunt – cooperation between members of a group gives them a good chance of success in a risky, high-return venture, but an individual can win a guaranteed but lower reward by breaking the cooperation and going it alone.
  9. Work to create transparent processes that are inherently fair.
  10. Favor smaller groups, it’s easier to foster trust and cooperation