The Flaws of Simplification, and the Pieces to Be Added (P05 Reading Response – Business and Competition)

     The Red-Blue Exercise (RBE in short), as stated by Roberta Wiig Berg in her paper titled “Competition and Cooperation, the Wisdom To Know When”, is a simple game designed to help determine people’s competitive behavior in a prisoner’s-dilemma style of field. However, due to the game’s simplicity, there are instances in which said simplification leads to conclusions that could be considered as misrepresentative of the real world. In the real business world, there are incentives present, an infinite amount of possibilities within competition brought by different types of situations that arise, and different communication levels present.

     One of the factors that RBE did not look at was incentives. This paper stated arguments in the parameters of “whether they [the players] called the exercise ‘just a game’ or not”. This is important because in the business world there is generally something to gain or lose in every interaction between two different legal entities. That something is money, since the main objective of any business is to either make a profit or a surplus (for non-profit organizations).  This exercise doesn’t take that fact into account, and allows for the possibility of people disregarding the necessity of taking it as seriously as it should be. What would happen if the game presented something to gain for the victor and something to lose for the loser? There could be a prize pool implemented that would take equal contributions from every member of the exercise, and the added incentive to win the game could help in further raising the credibility of the test by creating results that generate data closer to interpretations of the real world.

     Another aspect of RBE is that the point system is restricted to one set of parameters. Something could be done with the test that could alter its results would be to change the rules. Specifically, the point system that it has. To make a comparison, if we recall, the prisoner’s dilemma, which this exercise is heavily based on, has it’s point system as follows:

Prisoner A   

Prisoner B   

Prisoner B Cooperates Prisoner B Betrays
Prisoner A Cooperates Both serve 1 year A serves 3 years, B goes free
Prisoner A Betrays B serves 3 years, A goes free Both serve 2 years

Now let’s look at RBE’s point system:

Team  A        

Team  B      

Team B Cooperates Team B Betrays
Team A Cooperates +3 for both teams +6 for Team B, -6 for Team A
Team A Betrays +6 for Team A, -6 for Team B -3 for both teams

There are a few noticeable differences between the scoring of the games, which (apart from the obvious use of different numbers) are:

  • While the prisoner’s dilemma revolves around cooperating to mitigate losses (either one or both prisoners serve time, with the least net amount of years served when both cooperate), RBE revolves around the idea of cooperating to make a gain (if both teams cooperate, they both earn points, otherwise, at least one team loses).
    • What would happen in RBE if, in the situation that both teams betrayed, they would get either 0, +1, or +2 (no double loss)? When seeing the prisoner’s dilemma, both teams lose when they perform the same action, so what would happen in RBE if both teams win in the case that they perform the same action (or at least, stay neutral when both teams betray)?
  • The prisoner’s dilemma has a different amount of loss when both teams perform the same action, while in RBE the gain when both teams cooperate is equivalent to the loss when both teams betray.
    • How would the results change if that equivalency wasn’t there? As an example, what if the gain when both teams cooperate be +4 instead of +3, and what if the loss when both teams betrayed be -4 instead of -3. Would the teams be more swayed to betray or cooperate without the equivalency present?
  • In the prisoner’s dilemma, the worst outcome for a prisoner is not the total of the outcome when both players betray (-2+ -2 ≠ -3). Meanwhile, in RBE, in the situation that one team betrays and the other one cooperates, the total gain of cooperation is transferred to the team that betrays (3+3=6) and the total loss of betrayal is transferred to the team that cooperates (-3 + -3 = -6).
    • What happens when said equivalency isn’t present? Say that in RBE, when one team betrayed and the other one cooperated, the result would be a +8/-8 split, or a +4/-4 split, or a +7/-5 split or a +5/-7 split. Would there be significant changes that alter the conclusion of results in different situations?

Overall, the main question that encapsulates the aspect of modifying the point system in RBE is: Would different modifications of the point system create different results, or would the players still decide to compete as a reaction?

     An issue with RBE is that it the lack of communication stemming from the fact that it lacks a conference before the first round and only allows for the possibility of two meetings. This situation is addressed in the real world, but forced in this exercise, creating a misrepresentation. In the real world, meetings are held and communication systems (e.g. mailing, calling, and online chatting platforms) are in place in order to be able to address communication issues at any time,  In order to address this misrepresentation in the exercise, would be by asking: Would different timings and amounts of communication enhance cooperation between teams? By making this adjustment, different (including more realistic) changes in communication levels would allow for real-world levels of communication to be present in this game, whose objective is to give a real-world representation of the choice between cooperation and competition.

     Overall, while the framework of the RBE definitely represents a step towards the misuse of competition in certain situations, some adjustments could help in making it give better representations of the real world in the conclusions that are created based on the results from the usage of this exercise.

(Image credits to Kevin Dooley)

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