The prisoner’s dilemma is a widely know experiment. If you know of it, please skip the following explanation paragraph.
The gist of it is that two people are put in cells. Person A is told that if they snitch on the other person for a crime they both supposedly committed, that Person A will get a 1 year sentence. But if the other person snitches too, they’ll both get 5 years. And if both don’t snitch on each other, they both get 2 years. Now you can imagine what happens. Both people invariably snitch, because neither can ensure in any reliable fashion that the other won’t snitch.
Interesting update: if the game is played for long enough with some other type of reward or punishment, the two people will learn to cooperate. They will fall into what researchers call the tit for tat strategy. If me and you play often enough, we will come to trust the other person and if you cheat once, then I will cheat once too and we will both be worse off. We are incentivized to simply cooperate. The key to ‘teams’ falling into this strategy and being better off is that they know that the other person will be around to ‘play again’ and they don’t know when the game will end.
Next let’s think about interpersonal interaction among a closed and small society. If I know everyone in a group and that these members are going to be part of my group for the foreseeable future, it’s obvious what happens. People no longer sit in the prisoner’s dilemma and fail to cooperate. They know the other player will be around to play many more of the types of games that, with cooperation, will end with both sides benefiting overall. And so it’s in closed social groupings that people fall into the tit for tat strategy. It’s a one time prisoner’s dilemma when you don’t know the person in the car next to you… because, to the wind with it, you won’t likely ever see that person again.
Thanks Behavioral economics, you’re the shiz.