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Three social dilemmas have received special attention in the literature (for a typology see Heckathorn, 1996). These focus on issues of trust, competition, and coordination. The best known of these is the Prisoner's Dilemma (PD) (see Figure 21.1A).
It is named for a vignette in which two criminal suspects are questioned separately about a crime. Their interests derive from the preference order of the core game's payoffs. The most preferred outcome is unilateral defection (‘Temptation’, T), where one benefits from confessing when the other remains quiet; then comes Universal Cooperation (the ‘reward’, R) where both remain quiet and receive light sentences; next comes Universal Defection (‘punishment’, P) where both confess and are severely punished; and the worst is Unilateral Cooperation (‘sucker’, S), where only the other confesses so one's own penalty is most harsh. A second requirement is that the reward from universal cooperation is preferable to any mix of unilateral cooperation and defection (i.e., R > (T+S)/2). The essential problem is one of trust. If the prisoners can trust one another to act on their common interest in remaining quiet, they can escape with a light sentence. A marker indicating the presence of this dilemma is the potential for hypocrisy. Whenever individuals are tempted to act in ways they would prefer others not adopt, the presence of a PD should be suspected. This game has become the paradigm for cases where individually rational actions lead to a collectively irrational outcome.
The PD can affect dyads or larger groups. A group version arises when a group seeks to produce a public good. A public good is defined by two characteristics. First, excluding anyone from its benefits would be impractical. Examples include police protection and national defense. Second, public goods are characterized by jointness of supply, for example, the cost of national defense does not increase along with population. Because of these two attributes, provision of public goods faces a free-rider problem, in that even those who did not contribute to their production none the less enjoy their benefits. For example, even tax evaders benefit from police protection and national defense.
The literature focuses on two distinct means by which PDs can be resolved. First, incentives can serve to either reward those who cooperate or punish those who free-ride. An example of the latter is punishment for theft. Reciprocity includes another example of an incentive system, in which trustworthy or untrustworthy behavior is reciprocated in kind. Second, reputation systems provide information about who can and cannot be trusted, and thereby provide the means by which cooperators can locate and interact with one another.
A second social dilemma, which can be described in game theoretic terms as a Chicken Game, concerns competition for some form of scarce resource. In this game, the order of the two least valued payoffs are reversed from their position in the PD, that is, the new order is T > R > S > P. This reversal of preferences occurs, in essence, because less than universal cooperation suffices to produce most of the gains attainable from cooperation. This game is named for a contest in which drivers test their courage by driving straight at one another. Each player chooses between two strategies, Chicken (swerve to avoid a collision) or Daredevil (do not swerve). Thus the order of preferences is: Temptation, the other swerves; then Reward, both swerve; then Sucker, ego swerves; and the worst of all is Punishment, a head-on collision. The essential problem in a Chicken Game is allocation of concessions. Players combine a common interest in avoiding conflict, with competing interests regarding the terms of agreement, such as the allocation of courage, honor, or profit. This game fits systems where a common interest in collective action coexists with opposed preferences regarding the precise direction that action should take. Examples include the hawk-dove split that arises in many social movements, in which purists claim that pragmatists are selling out by forsaking the movement's essential goals, and pragmatists claim that purists' unwillingness to compromise will lead the movement into ruinous conflict.
The literature on this dilemma focuses on two ways in which it can be resolved. First, theories of bargaining seek to explain how actors assess the strengths of their strategic positions when deciding how many concessions to offer, and thereby seek to explain the allocation of concessions that make agreement possible, and the origins of conflict when efforts to reach agreement fail. Examples of these models include Harsanyi's (1977) model, resistance theory (Heckathorn, 1980) and Rubinstein's (1982) model. The various models agree on some principles, such as that all else equal, an increase in the costliness of conflict will weaken an actor's strategic position and lead to more concessions. A second resolution of the dilemma precludes or narrows the scope for bargaining by defining rights to scarce resources, as in a system of property rights. Thus a property rights system confers legitimacy on particular allocations of resources (Alchian and Demsetz, 1973).
A third type of social dilemma, which is a game theoretically described as an assurance game, arises when coordination is required for some joint endeavor. The effect in games such as those depicted in Figure 21.1 is to make universal cooperation preferred to unilateral defection, thereby reversing the order of the two most highly valued outcomes from their position in the PD, that is, the new order is R > T > P > S. This game derives its name from the fact that each player can be motivated to cooperate by the mere assurance that the other will do the same. A collective action system fits it if participation with others is valued, participation can take multiple forms, and therefore coordination regarding the form of participation is required. For example, if two people want to meet at a restaurant for lunch, they must coordinate their choice of restaurant. Though it might seem that resolution of the coordination problem would be trivial, it has proven especially challenging for rational choice theorists. One approach focuses on the identification of focal points around which coalitions of cooperators can rally.
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