Game Theory Decides Where Your Saturday Night Takeaway Comes From
For the last three years, a group of researchers has been approached by a couple of takeaway business in the Perth area. Their goal, to change how they receive orders in a bid to make more profit.
The common problem they had was a disruptive type of business championed by “Just Eat et al, the online food order platform (OFOP).” The business model allows customers to search, place and pay for their order on the go.
Unfortunately for the takeaway businesses, OFOP tends to benefit. This is because Perth marketplace is not driven by better programming or cost effectiveness but human nature. Their advantage is due to human nature not to cooperate even when doing so might be advantageous to them.
This dilemma can be explained through a 1950s quirk which has become the basis of game theory and ethics. The quirk is widely referred to as “The Prisoner’s Dilemma.” Here is the breakdown.
10 prisoners are serving a 10-year sentence.
They are told by their jailers that if they all raise their hands, each of their sentences will be reduced to two months.
They are also told by their jailers that if one of them chooses not to raise their hand, he can go free.
However, the prisoners are also warned that if two or more of them chooses not to raise their hands, then all their sentences will be doubled to 20 years.
The best thing for the prisoner to do is raise his hand to benefit the group. But as long as there is individual benefit, all prisoners are tempted to keep their hands down. As such, each prisoner’s sentence is extended.
Source: https://www.businesscloud.co.uk/news/game-theory-decides-where-your-saturday-night-takeaway-comes
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