The Ethics Game, Part 1

 

The effectiveness of game theory is based upon the idea that certain artificial situations analogous to real-life circumstances can be created, with the utility of various strategies tested in comparison to others. As I discuss in my must-have second book, Game Theory in Management (https://books.google.com/books/about/Game_Theory_in_Management.html?id=OwAgeMZQzt4C) there are many such artificial situations – “games” – used to compare these strategies, including the Ulitmatum Game, the Prisoners Dilemma, or the Pirate Game. But one particular game tends to be used rather often when evaluating participation/defection strategies. Its name is Hawk/Dove.

The parameters of the Hawk/Dove Game are pretty simple. Imagine two birds in a common environment. These birds each have two basic strategies available to them – they can peacefully forage for food, and keep or consume all they gather, or else they can act aggressively, and attempt to take the other’s food by force. The population involved in this game maximizes their payout if they behave like doves all of the time. However, if the available food supply should drop below the level needed to keep both birds alive, the last one to switch to Hawk strategy will be the first one to starve.

The same basic truths are present when the population of birds is increased to 100, with some additional insights. In a population of 100 birds who have all employed the Dove strategy, if just one bird switches to Hawk, then other birds in the population will begin to do so in order to maximize their personal payoffs, and will continue to make the switch until something known as the Nash Equilibrium is reached. The Nash Equilibrium, named after Thomas Nash, the central character in the movie A Beautiful Mind, is:

a solution concept of a non-cooperative game involving two or more players, in which each player is assumed to know the equilibrium strategies of the other players, and no player has anything to gain by changing only their own strategy (emphasis in the source).[i]

In Hawk/Dove, the Nash Equilibrium is reached when the 100-bird population assumes a behavioral profile of 25% Hawk, 75% Dove, expressed as either 25% of the birds always act like Hawks, or else each bird acts as a Hawk 25% of the iterations, and like a Dove the remaining 75% of opportunities (known as a “Mixed Strategy”). Again, note that the overall population’s payout is maximized when every bird behaves Dove-like 100% of the time.

Meanwhile, back at the 100-person office, the organization’s shareholders have a natural incentive for everybody to act ethically (or dove-like), since the population’s payout is maximized when they do so. By “ethically,” I mean that the workers pursue the organization’s stated objectives, and do not act aggressively towards their co-workers. However, with the introduction of even one aggressive member of the project team, the entire team’s cooperative dynamic changes, and not for the better. Typical unethical behaviors in this case study include calumny, over-claiming on members’ achievements, exagerating other workers’ failures, and just generally acting in a manner consistent with what Michael Maccoby described as Jungle Fighters in his seminal work The Gamesman. Of course, the exact point of the Nash Equilibrium in such circumstances will change from organization to organization, but it’s a rare company that can expect the entire population to return to consistently selecting a non-aggressive strategy once at least one member has successfully engaged in aggressive tactics. This is especially true if the organization is in decline, or is perceived as such, and its members believe that they must act hawk-like, or lose their jobs. Is there a managerial strategy to forestall such a downward spiral? I believe there is, and its characteristics include…

Wow! Look at that – out of blogging space again! I’ll take up other aspects of the Ethics Game, and useful strategies for its successful completion next week, in Part 2 of The Ethics Game.

[i] Nash equilibrium. (2016, February 3). In Wikipedia, The Free Encyclopedia. Retrieved 20:40, February 6, 2016, from https://en.wikipedia.org/w/index.php?title=Nash_equilibrium&oldid=703036567