1: Trapped in the Matrix

There are a number of logical puzzles based on a subject who is given a choice to cooperate or to cheat - but with the caveat that if the other side cheats as well, both will lose.

The prisoners' dilemma is a common one. Various versions have been concocted, but theyre based on the same situation: an accused criminal is given a choice to keep silent or rat on his partner in crime.

The logical choice is to say nothing - but there must be trust between the two parties that the other will also keep silent. Otherwise, silence is a risk that the other party will confess first.

Arguably, the "problem" can be said to be a lack of communication between parties - had they the ability to discuss the options together, there would be no dilemma and they would choose the course of action of the greatest mutual benefit.

But this is not always true: witness any nasty celebrity divorce, in which a couple could save the legal expenses and public embarrassment if they worked out their differences in private, but choose to engage in an expensive and very public row. They could communicate, but choose not to.

It's likewise true in any situation where an agreement exists - such as price-fixing among competing businesses - in which being the first to break an agreement will gain more or suffer less than the other parties, but it considers harm to them to be a benefit to itself, putting the oath-breaker "ahead" of its competitors.

The author mentions three main approaches to overcoming challenges to cooperation: changing attitudes, appealing to benevolent authority, or undertaking a self-enforcing strategy. The author explains each in detail in the sections that follow.

Changing Our Attitudes

One solution to dilemmas such as these is to adopt an attitude of altruism - to be more socially minded, willing to sacrifice for the benefit of others. This approach would work flawlessly - but only if everyone adopted such principles and was incapable of choosing to act otherwise.

While certain species (ants, bees, and termites) are genetically hard-wired with a hive mind, most of them (humans included) simply are not - and we are inclined to act in self-interest, especially in pressure situations, regardless of the moral or religious principles we profess.

Benevolent Authority

Another solution is appeal to a benevolent authority: to subject oneself to the judgment of an objective third party who has no involvement in the situation, and will neither profit nor lose from the outcome. This is the principle behind English law: an impartial judge or jury that can render a fair and dispassionate decision that achieves the greatest good for all involved.

The problem with justice as a function of a political system is that it tends to be self-serving: the king (or the state) acts in the way that suits its own interests rather than deriving a fair solution between the parties. Or it may dictate a solution in favor of one party with an interest in gaining favor from that party - for example, a judge who decides on a resolution that favors a party who voted for him, or contributed to his election fund, etc.

In the end, the author concludes that "benevolent authority is largely a myth" - as authority is power, which is self-serving. And however much a person in a position of power claims to be acting in the best interest of the people over whom they have authority, their first concern is invariably their own position.

Moreover, legal authority is impotent or impractical in many commonplace conflicts. A legal proceeding requires there to be a conflict of a material nature (in both the sense of physical loss, and in the sense of being substantial enough to warrant a trial) and has such rigid standards and procedures of proof and evidence that "justice" has less to do with the truth than what can be proven in court.

Self-Enforcing Strategies

The author proposes an approach that avoids the need for external authority by using Nash equilibrium as a self-enforcing mechanism to remove the incentives for either party to "cheat" on cooperation.

(EN: The author attempts to explain this, but it's a bit opaque all the same - fundamentally, it's committing to a choice based on your assumptions about the other person's actions, geared to maximize your profit or minimize your loss based on the strategy you assume the other player will follow.)