So how do you win the game? It turns out that the most successful strategy is one of “Generous Tit for Tat”.
A Quick Refresher
[Please feel free to skip this section if you are familiar with the setup of the Prisoner’s Dilemma.]
In case you need a refresher, the classic setup of the Prisoner’s Dilemma is this:
Two co-conspirators (A and B) are arrested and held in separate cells with no means of communication. The prosecutor has insufficient evidence to convict either of them on the principal charge, so she offers each prisoner a deal: Betray the other in exchange for a lesser sentence.
- If A and B both remain silent, each will serve six months on a lesser charge.
- If A and B betray each other, each of them will serve five years.
- If A betrays B, but B remains silent, A will be set free while B will serve ten years (and vice a versa)
Because this is true for both parties, the most likely outcome is that the two prisoners will betray each other, resulting in each receiving a five-year sentence. The best mutual outcome (a six-month sentence) is achieved if the parties cooperate with each other and both remain silent.
Background: The Cuban Missile Crisis
At the time of the Cuban Missile Crisis in 1962, Robert Axelrod – now a professor of political science at the University of Michigan – set up a computer program to run a sequence of successive simulations of the Prisoner’s Dilemma. He then invited leading game theory experts to compete in a tournament using a program that embodied the strategy the expert thought most likely to win.
The goal was to answer the question of how to deescalate the crisis, by cooperating without sustaining significant losses.
- “Massive Retaliatory Strike”: Cooperate until the first attack, and then keep attacking for all other rounds.
- “Tester”: Begin by attacking. If the other program retaliates, back off and start cooperating for a while. Then attack again. “Tester” is designed to test the limits of the other program.
- “Jesus”: Always cooperate.
- “Lucifer”: Always attack.
- “Tit for Tat”: Always begin by cooperating, then do whatever the opponent did on the last move. I.e., retaliate once, then return to cooperation.
If “Tester” plays “Massive Retaliatory Strike”, both do badly. If “Lucifer” plays “Jesus”, evil prevails.
“Tit for Tat” cooperates with “Jesus” for the entire game, while defending itself well against “Lucifer”. However, the problem with a pure “Tit for Tat” strategy is that it always retaliates against an aggressive strategy such as “Lucifer”, thereby resulting in mutually assured destruction.
And the Winner Is…
A slight modification of “Tit for Tat” optimizes the long-term success of the strategy: Instead of always retaliating against an attack, “Generous Tit for Tat”, retaliates only nine times out of ten.
When the program responds with cooperation instead of retaliation, this gives the other player an opportunity to reciprocate, thereby resetting the game and maximizing success for both players.
For one-shot players in negotiation, the classic Prisoner’s Dilemma setup would apply – but for the facts that 1) the players can communicate with each other, and 2) a negotiation always consists of several rounds.
In any series of negotiations, which includes preliminary issues such as the selection of the mediator, and the location and timing of the mediation, you can choose your strategy. You can attack, or you can make a cooperative move.
If annihilation is your goal, keep in mind that your negotiating partner may respond in kind. If, however, your goal is to arrive at a mutually beneficial solution, you may want to consider adopting a "Generous Tit for Tat" strategy.