Prisoner’s Dilemma: To Cheat, or not to Cheat Part 2 of 6

Last time I told you about my old friend’s view on cheating. Though his thinking was flawed, it could be explained through an economic decision-making model called the Game Theory, and the problem that arise from it called the Prisoner’s Dilemma. The thing is, at the first glance it looks like the theory supports cheating, but further examination tells a totally different story.

Now, there are many academic papers written on Prisoner’s Dilemma, with many variations on the game. But for the purpose of this analysis, I’ll just look at the game in its most classic form, with just one variation at the end.

To put it simply, the Prisoner’s Dilemma is nothing but the decision of whether or not to screw your partner over.

For example, say two suspects were arrested by the cops for robbing the bank, but the cops don’t have sufficient evidence to nail either of them. So they take the two wise guys into separate interrogation rooms, give them a Red Bull, and turn up the charm. “Just confess,” the detectives coax Suspect #1, “You’ll get off in no time if you work with us.” They say the same thing to Suspect #2.

If the two suspects refuse to cooperate with the cops, then they both walk free that very same day, because the cops ain’t got nothing on them.

If they both cooperate, then they each get a medium level sentence.

(continued in my next post...)

Prisoner’s Dilemma: To Cheat, or not to Cheat Part 1 of 6

To cheat, or not to cheat, that is the question that many have asked throughout history.

There are those who would be offended that the question should even be asked at all, there are those  who would commit the act without the slightest hesitation, and then there are those who protest just a tad too much (those are the ones you really watch out for).

Once I had a friend who cheated on his girlfriend, so I asked him why he did it. He said he had no idea if she was sleeping around, and in case she was, he’d better sleep around too just to even the score. If she isn’t cheating, then he wins. If she is, he’s not losing.

That was a very cynical way to look at life, and my friend wasn’t right in his assumption. Turns out, his girlfriend wasn’t cheating, but she did find out about him doing so. He ended up losing out on a really amazing girl*.

*That’s why one should never assume that just because a guy cares a lot about whether you cheat or not, that he actually has integrity himself. He might just want to be the only cheater in the relationship. Sometimes, the cheaters make the most suspicious partner because that’s how they view the world.

(continued in my next post...)

Information Asymmetry: The Not-So-Good-Looking Players

Just for fun, let’s see how Information Asymmetry might affect the not-so-good-looking players in the dating market.

In our society they do not give out certificates for good lovers, and referrals are as awkward and creepy to give as they are to receive. So most people make their sexual choice, especially the ones of the causal nature, based on appearances only. “If he looks hot, then I’m going to assume he’s good in bed.”

Hence the paradox for the poor, poor, not-so-good-looking player: To prove his skills, he has to get the girl into bed. Yet without the good looks, he cannot get her into bed, so he can’t develop those skills in the first place. And even if he’s got the skills, he still cannot prove it without convincing her to go to bed with him...

Okay, my head’s spinning a little now.

Anyways, this dilemma is why the not-so-good-looking players generally have the gift of the gab. Flattery, lies, manipulation, persuasion... Hey, he’s gotta compensate for his looks somehow, right?

Feel free to tell me your horror story!

Information Asymmetry: Let Your Character Stand the Test of Time

Sometimes, the best way to counteract Information Asymmetry is letting time do its job.

As I mentioned before, sometimes Information Asymmetry arises from time differentials between the receipt of information. Most people who cheat get caught sooner or later, but if you don’t cheat then you have nothing to worry about in the long term.

Often, everything comes down to trust and gut instinct anyways. The cost of detection is high or close to impossible, and even a private detective can’t track a partner 24 hours a day, 365 days a year.

So let your character stand the test of time, and the market will reward you.

Information Asymmetry: When Blind Dates Become Desirable Part 2

In the last post I talked about the many means to create certain guarantees in our society. As you can see, there are many ways to get assurances. But there is no such system in the dating market. There is no record to track the number of hearts broken, or the number of times a person cheated. Nothing to tell you that this is the guy’s 12^th time telling a woman he just needs a bit more time before he commits.

But though such a system doesn’t exist in dating, there is another thing that human beings have relied on since the beginning of time. It’s neither 100% scientific nor foolproof, but it’s sometimes the closest thing to assurance one can find: reputation (remember how Cassio kept moaning about it to Iago in Othello?).

That is why people who swear that they won’t get set up eventually do as times goes by and they get fed up with the dating market. Friends and family who do the setting up act as character references for the potential matches. They might not always find people you are attracted to (after all, attraction is such a subjective thing), but at least they offer safer (less creepy/crazy) bets than strangers off the web.

Blind dates can work great, especially for people who’ve been betrayed in the past and for whom trust is a big issue. It is definitely worth adding it onto your existing search strategies. But now before you all rush off to get mum on the phone with Aunt Norma who’s going call her bingo club, do remember this: As Iago puts it: “Reputation is...oft got without merit, and lost without deserving...” Someone could be creepy yet pass your friends and family’s tests.

Information Asymmetry: When Blind Dates Become Desirable Part 1

One of the major problems with Information Asymmetry is that because people don’t have all the information about a certain product, its price cannot truly reflect its real value. What can you do if you’re the superior product and you want to stand out from the run-of-the-mills? Often some sort of assurance can be used to gain the buyer’s confidence.

In our society, there are many means set up to create certain guarantees regarding a product/person. These guarantees provide extra information, and they’re valued based on their impartialness. For example:

1. -The “Certified Organic” labels we see in grocery stores.
2. -Honda’s Certified Used Cars (so buyers can distinguish them from the potential lemons on the lot).
3. -A clean driving record (history is a good indicator of the future).
4. -A spotless credit rating.
5. -Education credentials. (I once met a guy at a friend’s gathering. He was one of those cool kids who peaked in high school. Once he sat down, he started ranting about how only stupid people finish high school, and he was too smart for that. He never once stopped and asked anyone how they were doing, or even asked who they were. He was too busy being self-conscious and overcompensating. NOT ATTRACTIVE!)

(continued in my next post...Please comment and let me know what you think of this post!)

Information Asymmetry: How Cheaters Drag Down the Entire Market Part 3

In the last post I talked about Information Asymmetry, and how not everyone has the same, or the right information, or gets it in a timely manner.

The sad thing is that humans by nature will lie to get the advantage, as long as they can get away with it.

Now let’s see how this can be applied to the dating market. The dating market is vast and wide, and you are dealing with people you and your immediate circle know nothing about. A man who only wants you to put out could give a very decent front, a committmentphobic could pretend to be interested in marriage, and nobody is going to put on their dating profile caption: “Looking for Rebound, the More Gullible the Better.”

And because nobody has perfect information, people could completely misrepresent themselves and be able to get away with it. The good and the bad ones are all mixed together. In such a market, the players (with their great acting skills) are at an advantage. A girl could be sleeping with a team of sailors behind a guy’s back, yet enjoy the privileges and treatments reserved for a faithful partner in an exclusive relationship.

This is bad news, if you’re not the type to sleep with a team of sailors.

When the bad girls pass themselves off as the decent ones, the decent ones are in trouble. With the market flooded with fakes, the decent ones find themselves in stiff competition with people who aren’t playing fair. Soon the guys get burned out, and refuse to trust even the nice girls. It’s like if people cannot tell the difference between organic and conventional food, then they’ll refuse to pay a high price for anything that comes along. As a result, the price gets driven down across the board.

Next we’ll look at some of the measures to counteract Information Asymmetry. Please comment and let me know what you think of this post!

Information Asymmetry: How Cheaters Drag Down the Entire Market Part 2

In the last post I talked about the market version of the perfect world. Ahhhh...Imagine living in such a world when it comes to dating. Nice, sincere, honest people get greatly valued for who they are, and everyone knows the true colour of the nasty ones. A world where no one could get away with lying and cheating. None of that I’ll-be-a-perfect-gentleman-for-now-but-I-really-just-want-to-jump-your-bones, or the I’m-a-committmentphobic-but-I-won’t-tell-you-till-six-months-down-the-road, or the I’m-not-over-my-ex-yet-but-you-seem-like-a-good-distraction.

Wouldn’t that be nice?

Of course, we don’t live in an ideal world like that. Remember in high school chemistry class, and they told you a dozen rules, and then a zillion exceptions to them? And only the exceptions were ever really on the exam? Same thing with economics. Economists come up with a perfect world for us to fantasize about for like, ten seconds, then they tear us down with the exceptions.

When a market is not working efficiently, it’s called Market Failure. Quite a number of things could lead it that, but for now let’s talk about one in particular called Information Asymmetry.

What is Information Asymmetry? It means one person has more or better information than the other, and that gives him/her an upper hand in the market. How could this happen? Remember the little town we talked about where news spread like wildfire? Imagine that it’s not a small town, but a large city where people don’t even know their neighbour’s name.

Even if a segment of the population had tasted the awful toothpaste or the heavenly bread, not everybody is going to know about them right away, if ever. The toothpaste might get away with charging $5 for a long while before people catch on. Have you ever seen a very old scam still going strong, and wondered why people haven’t learned by now?

In reality, not everyone has the same, or the right information, or gets it in a timely manner. So products get under or overvalued.

(continued in my next post...)

Information Asymmetry: How Cheaters Drag Down the Entire Market Part 1

If we are to assume that the dating world is a marketplace, then we must examine the good, the bad, and the ugly in such markets.

In the perfect world, a free market is supposed to operate efficiently (Market Efficiency). That means everything is in perfect karmic balance: everybody has the same amount of information, the right information, at the same time, and they trade in the market based on what they know. Because of that, prices in the market would always fully reflect all available information out there.

It’s like living in a small town where everybody knows your name, your dog’s name, and your dog’s vet’s name.

Say a new toothpaste arrives in town charging $5. A few brave townsfolk try it and report it tastes like batteries. Everybody knows about it right away and refuses to pay more than $1 for it. Then $1 becomes the toothpaste’s new price, because everybody now knows that it tastes disgusting.

The next day a newcomer sets up a bakery shop in town and asks $10 for a loaf of bread. Seems kinda pricy, but a few people decide to give it a try. Turns out the bread tastes so good, one bite and you’re ensured a good mood for the rest of the day. The word spreads and soon there’s a line up for the $10 loaf because everybody knows that it is worth it.

In that perfect world, no one is going to overpay or underpay for anything, because everybody knows everything there is to know about the product. Quantity goods charge a high price, and crappy products charge a low price (or even find themselves driven out of the market). Price reflects the true value of the product, and the market is said to efficient.

(continued in my next post...)

Groupthink: The Orgasm That Was Not Part 2

In the last post I talked about Groupthink. Now let’s see how that could be applied to relationships.

I once knew a couple who looked like the perfect couple. But unbeknownst to all their friends and family, they were having a hard time on many fronts, including their sex life. Yet they were very desperate to make things work, so they convinced themselves that they had the perfect life together. The perfect house. The perfect car. The perfect sex life. In their denial, they actually managed to convince themselves that she’d had tons of orgasms in the bedroom, when in reality she hadn’t.

“Yeah...errr...that was...great!”, “Yeah...umm...I could totally tell that you...err...enjoyed it!” Pat, pat, on each other’s back, for the great life they have together.

Technically, it’s not faking it if both sides were convinced that it actually happened, right? What would be the correct term for it, mutual-fakegasms???

The couple dragged it out for years. Then one day, long after they divorced (over a couple of other major issues), the woman finally told me the truth.

“But you kept telling me how happy you were!” I protested.

“Yeah, I kept telling myself that too.” She said.

Had they faced the truth about the reality of their situation, they might’ve been able to seek help, or at the very least not waste years convincing themselves that they were happy when they weren’t. Lots might have happened during that time: buying the deed to a cottage is one thing, bringing children into the world is quite another. Talk about far-reaching consequences.

So take heed of this story and be a little more honest with yourself, whatever stage your relationship is in. Sometimes every group needs a whistle blower, and every sex life needs a Deep Throat (yes, pun intended!).

Groupthink: The Orgasm That Was Not Part 1

Here’s a little theory I picked up in my university course in Organizational Behaviour. Turns out, funny things happen when humans are in groups.

(Actually, when you think about it, most of the horrible things in history happened because certain humans were in a group: from watching blood sports in the Coliseum, to the Salem Witch Hunts, to the Holocaust.)

Just like the Borg who could only speak in one collective voice (except the Queen, of course), group members try to reach consensus, even at the cost of disregarding reality. It’s called Groupthink.

In other words, everybody cares too much about not rocking the boat and too little about whether the boat is heading towards a waterfall.

Everyone in the group convinces themselves, and each other, that there is nothing wrong with their concept/assumptions/decisions, even though the flaws are blatantly obvious. It’s like a group of amateur stamp collectors who talk and talk until they are convinced that they’re just as good as the guys on the Antique Road Show.

How does this apply to relationships? I’ll show you how in my next post!

Sunk Costs: The Danger of Not Recognizing It Part 2

In the last post I talked about sunk costs, and now here’s an example of how it applies to relationships.

Once a woman I know was planning to marry a man she no longer loved. So I asked her why.

“Well, I paid for his tuition fees, wasted almost a decade of my youth on him, and I didn’t take that job overseas because of him. I’m not about to have it all come to nothing!”

Honey, it was already nothing.

True, that good-for-nothing will never pay her back the tuition fees, but that’s not a good reason to marry him! In fact, she should run in the opposite direction.

The tuition fees, the wasted youth, the missed overseas opportunity...those are all sunk costs. It doesn’t matter if she marries him, joins the circus, or wins the lottery tomorrow, nothing can influence that past.

My friend ended up divorcing him. And on top of not getting back the tuition fees, she’s now paying him spousal support. Talk about throwing good money after bad!

Here’s a golden rule: Failure to recognize sunk costs for what they are will lead to even more sunk costs.

If you feel that you’re giving too much, take some time to calm down and ask yourself if your sacrifices will yield any future benefits. The strange thing is, the higher the sunk costs, the stronger the urge it is not to recognize them. I guess “heavily-invested” sounds a bit better than “heavily-lost,” but in the long run being courageous does pay off. Your future self will thank you.

Sunk Costs: The Danger of Not Recognizing It Part 1

Once I was in a car when a sad thing happened. As the car got started I noticed a fly sitting on the outside of the glass in front of me. As the car sped up, the fly hung on and refused to fly away. It kept hanging on even as the car got to the highway, and the strong wind battered and broke off all its wings. Finally, the poor thing couldn’t hang on anymore and got blown away.

I feel sad every time I think about that fly. I know that it acted instinctively, that it had no way of knowing that it should’ve flown away when the going was still good. Still, I wish that it had not hung on.

It’s also sad that many people hold onto bad relationships with the same mentality.

In economics, sunk costs are old costs that have already been incurred. It’s the past, it’s dead, and there’s nothing you can do to get it back. According to the theory, people should not be basing their future decisions on sunk costs, because no matter what you do they can not be recovered.

If only human beings could think that rationally in love. Just like that poor fly, many people simply hold on too much and too long, instead of accepting what was not meant to be.

(continued in my next post...)