Prisoner's Dilemma: Cooperation and Conflict

• Study guide for exam, based on in-class discussions and text

Prisoner's Dilemma Style Conflict

• Individuals choose between cooperation and self-interest.
• The best collective outcome occurs when both parties cooperate.
• Individual incentives can lead to non-cooperation.
• Example: "Information dilemma" is where withholding information benefits individuals, but sharing it benefits the group.

Consequences of Acting Uncooperatively in Multiple-Round Conflicts

• Leads to loss of trust and reduced cooperation.
• Often results in worse outcomes for both parties over time.
• Demonstrates the importance of long-term strategic thinking.

Tit-for-Tat Strategy

• Effective because it starts cooperatively, retaliates against non-cooperation, and forgives cooperative behavior.
• Works well in repeated interactions like competitive advertising.

Limits and Dangers of Tit-for-Tat

• Can lead to endless retaliation cycles.
• It does not work well if errors occur, such as unintended defection.
• Vulnerable to manipulation if the opponent exploits its predictability.

Biased Punctuation of Feud History

• People interpret conflicts in self-serving ways, reinforcing feuds.
• Attribution errors causing this include:
  • Sinister Attribution Error: Assuming bad intentions behind an action.
  • Actor-Observer Bias: Attributing our actions to circumstances but others' actions to their character.
  • Hanlon's Razor: "Never attribute to malice what can be explained by incompetence or ignorance".

Understanding Sayings

• "Lightning never falls from a blue sky" means unexpected negative actions often have a buildup.
• "The tree remembers what the axe forgets" means harmful actions have lasting impacts on the victim, even if the perpetrator forgets them.

Negotiation Goals and Parameters

• Resistance Point: Worst acceptable outcome.
• Target: Ideal outcome.
• BATNA (Best Alternative to Negotiated Agreement): Backup plan.
• Zone of Potential Agreement (ZOPA): Range where a deal is possible.

Negotiation Tactics

• Lowball/Highball: Starting with extreme offers to shift expectations.
• Anchoring and Adjusting: Setting an initial reference point to shape negotiations.
• "Split the Difference" Rule: Finding a midpoint solution.
• Logrolling: Trading off priorities to achieve mutual gain.
• Win-Win vs. Win-Lose vs. Lose-Lose Agreements: Cooperation and flexibility tend to produce better results.

Ethical Challenges as Dilemmas

• Many ethical issues involve competing "right" choices rather than clear right vs. wrong.

Ethical Dilemma Frameworks

• Consequentialism/Utilitarianism: Actions judged by outcomes (greatest good for the greatest number).
• Deontological Ethics: Actions judged by adherence to moral rules.
• Virtue Ethics: Actions judged by moral character.

Blind Spots in Ethical Reasoning

• Biases prevent objective moral decision-making.

International Management Styles

• Expatriate managers may favor their home country's practices, impacting effectiveness abroad.

International Business Arrangements

• Franchising: Licensing brand/business model.
• Licensing: Permitting use of intellectual property.
• Strategic Alliance: Cooperative agreement without equity exchange.
• Foreign Subsidiary: Fully owned foreign operation.
• Joint Ventures: Partnership between two companies for mutual benefit.

Tariffs

• Taxes are implemented on imported goods, affecting trade and pricing strategies.

International Business Practices

• Dumping: Selling goods below market value in foreign markets.
• Global Sourcing: Procuring goods/services internationally for cost or efficiency.

Hofstede's Cultural Dimensions

• Framework for understanding cultural differences, for example, individualism vs. collectivism, power distance.

Organizational Behavior Discipline

• This is the study of how people behave within organizations, impacting leadership and culture.

Big Five Personality Traits

• Openness, Conscientiousness, Extraversion, Agreeableness, and Neuroticism are used to predict behavior in the workplace.

Cognitive Biases

• Confirmation Bias: Favoring information that supports existing beliefs.
• Fundamental Attribution Error: Overemphasizing personality in explaining others' behavior while underemphasizing situational factors.

Theory of Social Intuition

• Ethical decisions are often based on immediate gut reactions rather than deliberate reasoning.

Explore the dynamics of cooperation and conflict through the lens of the Prisoner's Dilemma. Understand how individual incentives can undermine collective outcomes, leading to non-cooperation, loss of trust, and reduced benefits. Learn about the Tit-for-Tat strategy and its effectiveness in promoting cooperation, as well as its limitations, such as endless retaliation cycles and poor performance when errors occur.