For good reason, economists refer to communication in such a setting as "cheap talk". The fact that communication does not by itself resolve Prisoner's Dilemmas has real-world significance: it is why the parable remains a useful framework for problems such as collusion among firms or international treaties among states, where co-operation that would secure the greatest collective pay-off is difficult to achieve in the face of individual agents' incentives to renege. To overcome the Prisoner's Dilemma requires more than cheap talk: it requires repeated trials or transformed incentives, as Prof Kay suggested.
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branchandroot
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Date: Tuesday, 31 December 2013 11:17 am (UTC)For good reason, economists refer to communication in such a setting as "cheap talk". The fact that communication does not by itself resolve Prisoner's Dilemmas has real-world significance: it is why the parable remains a useful framework for problems such as collusion among firms or international treaties among states, where co-operation that would secure the greatest collective pay-off is difficult to achieve in the face of individual agents' incentives to renege. To overcome the Prisoner's Dilemma requires more than cheap talk: it requires repeated trials or transformed incentives, as Prof Kay suggested.