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Occasionally – but rarely – I am inspired to write a post based on what is going on around me in my Twittersphere. My twitter handle is @legalaware, and the account is here. Richard Moorhead, whose observations are always sophisticated, erudite and well-explained, posted something recently from the Economist on game theory (here’s a similar article).
Game theory is something known to us in #MBA land. The reason is mathematical models can be applied with success to some situations easily, such a perfect competition or monopoly. One of the compulsory modules in our BPP #MBA is markets and marketing. However, it does become an issue how two or few big players in a market, with little effective competition elsewhere, should approach the marketplace. Hence my joke to Richard – shouldn’t somebody run the Prisoner’s Dilemma with BPP Law School and the College of Law, who are ‘in the market’ in supplying legal education to non-law graduates who wish to study the GDL, to pursue a career, for example, as a barrister, solicitor, paralegal, academic, or otherwise?
The Prisoner’s Dilemma, is an aspect of game theory that shows why two individuals might not agree, even if appears that it is best to do so. A classic example of the prisoner’s dilemma is presented as follows. Here is then the version of the Prisoners’ Dilemma I had in mind.
- Two men from the College of Law and BPP Law School are invited to a legal #tweetup, but the organiser does not possess enough information for an a blog post. Following the separation of the two men, the organiser offers both a similar deal- if one testifies against his competitor (defects), and the other stays quiet (cooperates), the betrayer goes free and the cooperator receives the full one-year sentence. If both remain silent, both are sentenced to only one hour lock-in. If each ‘rats out’ the other, each will be subject to a three hour lockin. Each of two participants, who’d innocently gone to the tweetup for a good time, must choose to either betray or remain silent; the decision of each is kept quiet. What should they do?
- You are of course free to look up the suggested answers through game theory. If you get bored, you might wish to watch ‘A Beautiful Mind’ which tells the story of John Nash, a brilliant mathematician who was outstanding in this field.