Friday, December 26, 2008

Reflection on today's game

Some thing very interesting came out from today’s game. What if these group leaders do not know each other i.e. you do not know players of the game, how would you negotiate? The problem is more of information symmetry. Until we are, assure of what others are going to do, most of us will always be trying to minimise the negative payoffs rather than targeting positive payoffs, probability of which is very low. Many of us are risk-averse by nature and this nature is reinforced once you see the possibility of long chain of negative outcomes.

Even after negotiation, one group reneged on its promise, reason being short-term gain. The challenge is still how to inculcate these thought process of collective action in the situation of information asymmetry.

What if in the very first round we had that unexpected result of rabbit chosen by all the groups. In that case would we perpetuate the same result, I guess no. the incentive of one group to renege is still so high.

Then how can we restore this outcome. I think negotiation repeatedly. However, this negotiation will be successful only if games are to be played infinitely. It is very difficult to get the required result through out the number of times games are played finitely. Group will always try to deviate in the last round and because all groups will think in the same way, they know they will get the negative payoff; they will try to renege on the penultimate round. Taking this logic forward, it will not be surprising to see the deviated results from the first round itself.

Another thing to take note is the discussion that emerged once the instructor moved out of the room. All of us wanted to go for rabbit because we are tired of loosing. Most of us implicitly agreed that we should go for rabbit but then again one group reneged and look, how this affected the course of the game at least for the coming two rounds.

This is also a good illustration that most of the disadvantages that we could feel due to lack of collective action are intangible. The damages that are done to the environment hardly capture our attention because we are not going to be affected by it at the moment we commit something hazardous. What if instead of losing points, we were losing money, in that case after some losses I am sure that some strong mechanism of control must have emerged and people deviating from the norms must have been punished or at least were not allowed to play the game. I think the solution lies in the strong resolution to care for the short term and intangible losses. This will lead to collective action but how to control people who are not in proximity?
Can somebody help?

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