Matt Perryman

Why doing the right thing leads to the superior payoff

By Matt Perryman

There’s a thought experiment in game theory called the Prisoner’s Dilemma.

Two criminals, Billy and Willy, got pulled in by the cops as suspects in a robbery gone bad.

The cops don’t have enough for a full conviction, but they can get the boys on a minor charge that comes with a one-year sentence.

The detectives working case make a proposition to each man.

Billy can keep his mouth shut and do a year in jail, or he can rat out his partner and stay out of jail entirely while Willy does a 20 year sentence.

Willy’s made the same offer.

To us outside witnesses, the smartest thing Billy and Willy can do is keep their mouths shut, take the year, and go on their way as free men.

Instead, each man takes the promise of total freedom and rats out his partner. Both men end up serving the 20 year sentence thanks to their mutual betrayal.

The lesson is supposed to be that cooperation yields better results than defecting. Pursuit of immediate self-interest, which can seem completely rational, comes at the cost of worse outcomes for everyone involved.

Look at it like this, and you have a model for understanding what happens any time two self-interested agents come together to achieve a goal.

You can pursue the immediate short-term win at the cost of greater benefit, or focus on the greater win for everyone.

The risk is that your partner in the game is a short-term thinker. Since there’s always that nagging suspicion, there’s a downward pressure towards taking the short-term win for yourself.

If the other guy’s going to rat you out anyway, why not?

Thus the immense stupidities that happen whenever you bring together large groups of people.

The Prisoner’s Dilemma happens over and over again, from romantic relationships to long-term business dealings.

Thing is, we don’t see the self-interested goal win all the time. There’s a long-term pressure to cooperate.

Not only that, but defectors who don’t cooperate end up with worse outcomes in the long run. It turns out that human beings remember past betrayals. While you can “win” by stabbing the other guy in the back, it’s a long-term loss.

Everybody knows you as a viper. At that point, the rational strategy is punishing you.

This isn’t much different from a problem in moral philosophy.

Why should I do the morally right thing if it’s not to my benefit?

Why keep a promise if it’s going to cost me?

Why jump into a river to save a drowning kid if it will mess up my suit?

Here’s the thing.

The immediate “win” is not always your true benefit.

Aristotle told us that the virtues, which include courage and justice, while necessary for a good life, aren’t sufficient to live well.

A just and brave person can be broke, hungry, and sick in the street. He has the virtue, but it’s not enough for the good life.

A well-lived life must contain the virtues, but a virtuous life isn’t always excellent.

It’s no different from how a superior marksman can miss the target due to wind.

The best thing to do is cooperate until the other guy stabs you in the back.

It’s not 100% guaranteed to make you win every round–but nothing can guarantee wins every time.

It’s more helpful to think of the reliable bet over the long term.

Matt Perryman

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