Saturday, April 21, 2012

The Power of Signaling

Having never seen the British game show "Golden Balls" myself, my understanding of the game play is limited to what I have garnered from the modern day fount of knowledge, Wikipedia.

On the show, 4 players compete in a round-by-round elimination game, accumulating money as they go through a mixture of cooperation and trickery (deceiptfulness?), with a player 'voted out' at the end of each round, while the Jackpot continues to grow.

In the final round, the two remaining players square off in a classic prisoners dilemma, each having to make a decision of 'Split' or 'Steal' with the possible payouts of 100%, 50%, or 0%.

Int his episode, the signalling of one player is rather unorthodox and  significantly influences the final result.

Check out the video (apologies for the poor sound level)



By signaling so forcefully his intention to 'Steal', he removed half of the other player's decision tree.  On the surface, the resulting options appear to be equally poor for the other player, a payout of 0 regardless of his decision, but the signaler then creates another option by offering to split the payout 'off-set' after the show is completed.  This creates a potential new result of [Split / Steal → 50% / 50%], now the only favorable option, thus forcing his opponent to choose 'Split'.  By pidgeon-holing his oppponent, he changed the game.

The real beauty of this ploy, is that the signaler was resolute in his position, never wavering in his 'Steal' position.  By not allowing any doubt to enter into the equation, the prisoners delimma is reduced to a simpler decision.

The final 'trickery' of switching up and playing the 'Split' was an easy choice for the signaler.  Having removed the option of 'Steal' from his opponent's plays, the signaler was able to guarantee the overall preferred settlement of an equal 'Split' of the Jackpot.

How would you have reacted if your opponent announced vehemently that he was going to play the 'Steal'?

1 comment:

  1. The only problem I see is that game Theory relies on rational actors, and while many people are guileful self-optimizers, they are also irrational and unpredictable.

    ReplyDelete