03 Self-interest and the
Dilemmas of Cooperation
Figures and Tables
Locating ethical egoism
Identity-based
Ethical Theories
Principle-based
Objective
Consequencebased
Utilitarian
Ethical Egoism
Contractarianism
A simple game
Mike
cheat
cooperate
5
cheat
2
Nancy
5
15
15
10
cooperate
1. Who are the players?
2. What are the strategies?
3. What is the payoff matrix?
2
10
If Nancy cheats, what should Mike do?
Mike
cheat
cooperate
5
cheat
2
Nancy
5
15
If Nancy cooperates, what should
Mike do?
Mike
cheat
cooperate
Nancy
15
10
cooperate
2
10
What will Mike do?
Mike
cheat
cooperate
5
cheat
2
Nancy
5
15
15
10
cooperate
Mike has a dominant strategy = cheat
no matter what Nancy does
2
10
What will Nancy do?
Mike
cheat
cooperate
5
cheat
2
Nancy
5
15
15
10
cooperate
2
10
What will happen?
Mike
cheat
cheat
Nancy
cooperate
√5
5√
2
15√
√
cooperate
Cheat/cheat is best strategy for both.
2
Cooperate/cooperate is best outcome for both.
10
15
10
Benefits of cooperation
Simple model pin factory
Jack
Productivity per hour
Jill
Heads
Points
9
1
Solitary pin production in a 10-hour day
Total cooperative pin production in a 10-hour day
1
9
9
9
Total solitary pin production in a 10-hour day
Specialized part production in a 10-hour day
Heads Points
18
90
0
0
90
90
Constraining ethical egoism and avoiding the prisoner’s
dilemma (Apply a 6 unit fine for breaking the contract.)
Mike
cheat
cooperate
✔2
5-6=-1
cheat
5-6=-1
Nancy
15-6=9
✔10
15-6=9
cooperate
2✔
10✔