[FoRK] The Traveler's Dilemma

Aaron Burt <aaron at bavariati.org> on Thu May 24 12:54:30 PDT 2007

On Wed, May 23, 2007 at 06:20:15PM -0400, Stephen D. Williams wrote:
> I really need to talk to this guy to either figure out his deficiencies 
> or mine.  "In the years since I devised the game... this rejection of 
> formal rationality and logic has a kind of meta-rationality attached to 
> it."

Took me a while, but what I got was that this is a good model for how
some iterative strategies can ratchet you down the drain.

> Their "logic" that $2 is the rational choice is broken on several 
> counts.  The goal is to maximize payoff, not to guarantee that you do 
> better than the opponent. 

Yabbut if you iterate a perfectly rational strategy, you get to $2.
1. Start at a price of $100.
2. Think, "The other person's gonna do that, too."
3. Think, "If I go to (price - 1), I'll end up with (price + 2)."
4. Goto 2.

This resembles various social and corporate death-spirals.  (e.g.
cycles of layoffs and underperformance, escalating parent-child power
struggles.)  Folks can even compare iterations and realize they're going
downhill, but they're trapped by the expected behavior of the other
parties in the game.

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