Competition ? Cooperation

From the Blog of Phyllis G. Pollack.

When I started mediating cases, I never thought that I would have to be aware of or learn advanced mathematics. But a book that I recently finished has shown me otherwise. Entitled, Rock, Paper, Scissors: Game Theory in Everyday Life, its author, Len Fisher, PhD. (Basic Books (2008)) explains how game theory applies to everyday life. In turn, game theory is predicated on the Nash equilibrium, named after John Nash who won a Nobel Prize in 1949 for discovering that all social dilemmas arise from the same basic logical trap (Id. at 7.) Using his mathematical genius, Nash “. . . was the first to identify the logical trap (now known as the “Nash equilibrium”) and then to prove a startling proposition – that there is at least one Nash equilibrium lying in wait to trap us in every situation of competition or conflict in which the parties are unwilling or unable to communicate.” (Id. at 18.) (Emphasis original.)

What is the “Nash equilibrium”?:

“It is a position in which both sides have selected a strategy and neither side can then independently change its strategy without ending up in a less desirable position. . . .”

“Nash called such a state of affairs an equilibrium because it is a point of balance in a social situation, from which neither side can independently escape without loss. . . . So long as we act independently, with each of us pursuing our own interests, the Nash equilibrium will continue to trap us in a plethora of social dilemmas.” (Id. at 18.)

A perfect example given by the author is an acrimonious divorce:

“It would usually pay [sic] [for] both parties to compromise, but so long as one refuses to compromise, it is not worth the other party’s while to give way. They become trapped in a Nash equilibrium so that both lose out through the money they have to pay to lawyers and the emotional stress they end up going through.”

“. . . the parties are trapped in a genuinely paradoxical circle of logic that arises because they are unwilling or unable to communicate and to coordinate their strategies. But there is an escape clause: if the parties can communicate and negotiate, they may be able to break out of the dreadful trap.” (Id. at 23.)

The decisive feature is that the cooperative solution or negotiated agreement must prove more beneficial to each of them than pursuing their respective strategies independently of the other. (Id.) Otherwise, each party will “willingly” remained “trapped.”

In essence, each of us will approach a social situation with a “what is in it for me” attitude and thus pursue our own individual interests over those of the others or even of the collective whole, in the hopes of gaining the best possible deal. But this gain will come solely and only at the expense of every other person involved in the social situation. Only when we realize that if we continue to pursue our separate interests independently of everyone else, the result will be worse for all concerned, do we change our strategy from one of competition to one of cooperation. At this point, we are at the Nash equilibrium and realize that in order to get out of the “trap,” we must stop being competitive and begin to communicate and be  cooperative with each other. By doing so, we can turn a lose-lose situation into a win-win situation, so that everyone walks out a winner.

According to Nash, this theory applies to any social situation in which two or more persons are involved. Take a moment and reflect on a recent social dilemma, replay it in your mind, but this time apply Nash’s theory. . . . See what I mean. . . Life becomes game theory based on advanced mathematics.

Perhaps, mediation is meant to be the apex of the Nash equilibrium. The parties walk in with a “what’s in it for me” attitude and the goal of the mediator is to change the parties’ mindset from competitive to cooperative; to have each party understand that if she continues with her own strategy independently of everyone else involved, the situation will only become worse for all concerned, not better. . . but that the way to change this is to start communicating and cooperating and choose strategies by which each party can win; to go from competitiveness to cooperation; from lose-lose to win-win.

Is mediation the tipping point in game theory? Perhaps so.

. . .Just something to think about.

                        author

Phyllis Pollack

Phyllis Pollack with PGP Mediation uses a facilitative, interest-based approach. Her preferred mediation style is facilitative in the belief that the best and most durable resolutions are those achieved by the parties themselves. The parties generally know the business issues and priorities, personalities and obstacles to a successful resolution as… MORE >

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