Game Theory: Why being ‘nice’ is your best strategy

Nice people can come first.

Although this sounds counter intuitive and differs from our day-to-day experience, application of Game Theory to the problem of “being nice” suggests otherwise.

We often see people who cheat and bribe making it to the top. Following experiment explains why having this attitude is not good.

Prisoner’s Dilemma, an illustration of Game Theory, is a game that helps us understand how people make choices when they can’t communicate and their best choice depends on what someone else does. Imagine two friends, Alice and Bob, are accused of a crime, but there’s not enough evidence to convict them unless they confess against each other. The police separate them and offer a deal:

Confess: If Alice confesses and Bob stays silent, Alice gets a short sentence (1 year), while Bob gets a long one (10 years).

Stay silent: If they both stay silent, they each get a small sentence (6 months) for a lesser charge.

Both confess: If they both confess, they both get a medium sentence (5 years).

The tricky part is, neither Alice nor Bob can know what the other will choose. Do they trust each other to stay silent and get the lighter sentence, or do they confess to avoid the worst-case scenario of a long sentence?

Here’s why it’s a dilemma:

Confessing seems safe: No matter what Bob does, if Alice confesses, she gets the shorter sentence (1 year or 5 years which is less than 10 years). It seems like the “safe” choice, even if it hurts Bob.

But cooperation is better: If they both stay silent, they both get the best outcome (short sentence ie. 6 months). But that requires trusting each other, which is hard when you can’t communicate.

The Prisoner’s Dilemma teaches us about:

Trust and cooperation: Can people work together even when it’s tempting to cheat?

Self-interest vs. the common good: Sometimes doing what’s best for yourself can hurt everyone.

Making tough decisions: How do you choose when you don’t know what others will do?

Recently I came across this video on Game Theory which proves statistically and through experimental games that “Tit for Tat”, a strategy where you are nice till you are wronged, is a good strategy compared to when you want to take advantage of somebody’s else generosity.

Watch the full video to learn how being ‘nice’ is a good strategy and till when you should resist retaliation. Do share your comments below.