Thread by @joelanthony23

Game theory Thread:

Every time I sit in traffic, and see goons decide to drive horribly, I wonder what's wrong with us. But after awhile, I asked myself - is that second lane creator being rational? 😟

Let's go

1. It may seem odd to refer to serious, complex systems as games, but in reality, interdependent actors seeking goals and outcomes affected by situations and actions of others can just as ably describe chess as it does the global financial system

2. The key thing is as humans have grown beyond out small community settings to interacting within cities, countries, corporations and continents, the scales of interaction have increased greatly yet our goals and intentions largely remain the same.

3. In order to survive and thrive, which is most everyone's goal, we broadly choose between cooperation or competition with others for the resources we need to meet our goals.

4. In smaller groupings like families, villages, we tend to cooperate more, partly perhaps due to kinship and due to the clear consequences of defecting. The village thief or louse suffers greatly for their defection.

5. In larger settings with more strangers interacting, we're less motivated to play nice and have a more of a competitive edge to our outlook.

However we also do know that we must cooperate sometimes in order to get by.

This creates a fragile system.

6. Fragile because, even as we cooperate by say driving nicely and following queues like civilised people, there are sacrifices made at the individual level for group benefit.

But if the group is do large, it becomes, in effect, abstract. The individual only sees their losses.

7. And so defection occurs- individuals start to break the rules. Driving more recklessly. Jumping the curb, forming new lanes and merging at the last second.

Why?

Well why not? There is a reward for this, in that they get to beat the "suckers" queuing and get what they want.

8. In a situation that requires cooperation from all actors, detection becomes the most profitable, rational strategy.

In sports, it leads to cheating or doping.
Same in business, love, government,even down to something like traffic.

9. It's important to note that 'rational' here is not a synonym for wisdom or morality.

It simply means hypothetical - if I want that , I must do this. We make selections based not just on our goals, but also our values, perception of second and third order consequences.

10. The key thing to remember is there is what we desire to do and what we are incentivized to do. Between how we ought to behave and how we really do.

When the consequences for instance of us detecting are felt by other people, we are more likely to do it.

11. When someone is driving through a city, they might dump their rubbish out the window without a second thought. An act they would never commit on their own property..

We might speak about what they ought to do, but what we want is to incentivize them to actually do it.

12. Sometimes shaming works, sometimes coercion through law works, but each of these also create responses from the actors.

Actions and policies are oft judged &sold by their intentions,but we ought to look at what the impact of them actually are.

The road to hell after all...

13. It's interesting when I look at kampala traffic for instance. Things are moving on smoothly then jam starts to form. You see a few defectors slowly creep out of the queue and do their thing. It works for them a but only for a while.

14. Eventually, they cause proper jams, get nabbed by the cops or end up not being let back into the queue

Defection stops bring the best strategy as other actors abd the situation changes and cooperation yet again becomes the best strategy.

15. All in all, a state predominant cooperation incentivizes competition( everything from cheating to betting) and a state of predominant competition incentivizes cooperation ( everything from collusion to teamwork).

Neither state is in equilibrium.

16. So to answer my own question about if the goons driving badly are being rational. Yes, they are. But in a myopic way in my view. Because -

A) It's not a long term winning strategy
B) It fails to look beyond immediate benefit to long term consequences.
C) Just bad manners.

17. Thanks for coming through. I'm really enjoying digging deeper into complex system interactions and refraining from just assuming people are dumb( despite my jokes) and understanding how our interactions shape the world.

Have a lovely Sunday abd a great week ahead.

Queue properly. Please!