With the various outcomes there are also four possible sets of points awarded:<\/p>\n
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- You each gain 1 point (because each of you received what is most important to you but you had to give something of lesser value to get it).<\/li>\n
- You each get 0 points (because you didn\u2019t get what you wanted, but you also didn\u2019t lose anything either)<\/li>\n
- You lose 1 point and they gain 2 points (because you lost something of value and they have possession of both valuable items)<\/li>\n
- You gain 2 points and they lose 1 point (because you have both valuable items and they can go suck eggs [heh heh heh])<\/li>\n<\/ul>\n
In this little spy-game, there is one thing that is probably self-evident, but I\u2019ll state it anyway. Regardless of the outcome, neither party can seek restitution from an authoritative 3rd party (i.e. if you get cheated, you can\u2019t call the cops). The only other important tidbit of information is that each “spy” has to play against each other “spy” a multitude of times.<\/p>\n
The Results<\/h2>\n
By far, the algorithm that walked away with all the marbles was actually a very simple line of code with only two little “if-then” statements. It simply said,<\/p>\n
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- If I\u2019ve never met (played against) this other spy before, then I will assume they are honourable and I will be honourable too.<\/li>\n
- If I have met (played against) this other spy before, then I do to them this time what they did to me the last time we met.<\/li>\n<\/ul>\n
The Workshop<\/h2>\n
I found this a fascinating exercise with far-reaching implications. In our workshop, we give each participant a score-sheet, one black token and one white token. Then we explain the scenario and goal of the game. The goal is simple. Each player is to score as many points as they can. To play a round, each player pulls either the black or white token from behind their back in their closed fist. White signifies that they are offering the money (or the secret plans) and black means that they have stuffed their case with newspaper. Each player then reveals their token, marks their individual score, and moves on to the next round. Depending on available time and the number of players, we typically have each player meet every other player anywhere from 10 \u2013 20 times. More is usually better as players begin to see patterns emerge which help them make longer-term strategies. We then tally everything up, place it on the board on a master score sheet, and discuss highlighted findings. What the participants don\u2019t know is that ahead of gameplay, we secretly select an individual and give him\/her instructions to play according to the rules of the winning algorithm explained above.<\/p>\n
<\/div>\n
The math is simple. In any given exchange, if you\u2019re honest you can either score 1 or -1 points and if you\u2019re dishonest, you can either score 2 or 0 points. Since 2 is greater than 1 and 0 is greater than -1, one would think that it is always to your best interest to try to cheat your opponent. Indeed, typically in any workshop, there is at least one business school graduate who creates this mental matrix, thinks they have discovered a secret advantage not readily available to the average person, makes their decisions accordingly, and gets it all wrong.<\/p>\n
When we post the scores at the end of the exercise, everyone is eager to see who won. To date, for reasons that would take to long to explain in this article, this game has always been viewed as a competition and participants are extremely pleased if they scored more than anyone else did. But strangely enough, we\u2019ve never seen anyone score the maximum; in fact, it is not uncommon to see the highest score a whopping 50% less than the maximum score possible, and yet the “winners” (and I use the term lightly here) are usually happy with this.<\/p>\n
Somehow, in the minds of most people, “score as many points as you can” gets translated into “score more points than your opponent.” The two statements do not mean the same thing, just as “don\u2019t try to win” is not the same as “try to lose.” A thorough analysis of the game reveals that if we look at the maximum points available to both players per encounter instead of the maximum for a single individual player per encounter we see an entirely different picture.<\/p>\n
In order for one player to score 2 points, his opponent must score a -1. Adding the points together, we see that the exchange only generated 1 point of actual wealth. This means that for one person to win big, someone else must lose, and not just lose in the exchange, they must lose more than what they had prior to the exchange happening.<\/p>\n
The only time where more than one point (wealth) is generated, (and it is. coincidently, the highest total points generated in any exchange) is when both parties decide to act honorably and cooperate with each other. At this point, there are 2 points of actual wealth being generated and they are shared by both participants in the exchange. If we have 10 players who each have 10 exchanges with every other player, we see that each player has 90 separate exchanges. If by some miracle every player was honest all the time, each player would score the maximum 90 points and there would be a grand total of 900 points of total wealth generated.<\/p>\n
If players alternated being honest and being dishonest, they would score 2 points five times and -1 five times against each other player for a grand total of 45 points and there would only be 450 points of wealth generated in the entire game.<\/p>\n
If one player was honest and another was not every single time, the first player would score -10 and the second player would score 20. Over the entire game, you\u2019d get 5 players with -90 points each and 5 players with 180 points each: big winners and big losers but again, only a grand total of 450 points of wealth created.<\/p>\n
Now I know what you\u2019re thinking\u2026 you\u2019re saying to yourself, “I want to be that 180 point guy.” But 180 points is a theoretical maximum, and it would never work out. In actual practice, as soon as any player gives a rolled up newspaper even once, immediately his “opponent” (and now they are thought of as an opponent instead of a player) feels upset and at some point tries to get his lost point back. After that, neither is trusting of the other and often both degrade into giving a newspaper every time. When this happens, no actual transfers ever happen and everyone scores a 0 at every exchange. In addition, since all the exchanges between all the participants of the workshop take place in the same room, more often than not, others (meaning, future players) are at least marginally aware of the “Battle Royal” that just ensued. You can just imagine how they will approach future exchanges with either of these competing players.<\/p>\n
The Logic behind the Algorithm<\/h2>\n
The winning algorithm is an ingenious thought process largely because it is so simple (the best ones usually are). But let\u2019s break this down just a little to see what\u2019s really going on.<\/p>\n
Based upon the number of times we\u2019ve hosted this workshop, we find that we can assign labels to individuals based upon how players make decisions. The four archetypical types we\u2019ve identified are:<\/p>\n
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- The cutthroat<\/em>\u00a0\u2013 This person has seen the mental matrix and deduces that it\u2019s always to their best advantage to go for the big score. They give rolled up newspapers whenever they think they can, and when they don\u2019t, it\u2019s simply to lull their opponent into a false sense of security before they pounce again.<\/li>\n
- The idealist<\/em>\u00a0\u2013 This person plays with an inflated sense of morality and is honorable almost all the time.<\/li>\n
- The recreational player<\/em>\u00a0\u2013 Sometimes you win, sometimes you lose; it\u2019s all fun and games (until someone loses an eye).<\/li>\n
- The pragmatist<\/em>\u00a0\u2013 This person plays at, or close to, the way that the computer algorithm plays with slight variations based upon gut instinct.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n
The cutthroat is very quickly not trusted so other players also give the newspaper every time. His score is often very low because while he might make a few big scores early in the game, it\u2019s usually followed by a long string of “0\u2019s.” He might make marginally more against every individual that he meets, and feel vindicated by that. However, since the total wealth generated is so low, his overall score is also very low. It\u2019s a classic case of winning every battle but losing the war.<\/p>\n
An interesting sidebar is that this player never really knows he\u2019s losing. Because he may squeak ahead of every individual he plays against, he never sees the big picture until the end when the master scorecard is revealed. He walks away wondering how he can beat every opponent he met and still end up with one of the lowest scores on the board.<\/p>\n
In real life, if you experienced this person in your business, you would just stop dealing with him. Real businesses like this can only survive with a constant flow of new suckers\u2026I mean clients. This business model also won\u2019t work in smaller communities where reputations, good or bad, grow fast because of word of mouth (hmmmm\u2026 isn\u2019t the internet making our entire world one big “small” community?)<\/p>\n
The one exception to the cutthroat\u2019s ostracism would be meeting an idealist. The idealist is easy pickings for the cutthroat and this pairing will run up the score for the cutthroat (against this particular player but still only marginally higher in the big picture) and bankrupt the idealist. Again, in real life, the idealist would simply not deal with the cutthroat after the first few exchanges, but since the rules of our game are that they must all have a given number of exchanges with each participant, this forces the players to either abandon their belief system or pay the consequences. Any idealist that sticks to their beliefs and loses big can sometimes make back some of their losses with other players who feel sorry for them, but rarely enough to break even. Even in meetings with a recreational player, the player already knows what the idealist will do and might start out being mister nice-guy, but often the temptation to pocket a few extra easy points is just too great not to take advantage of, even if it\u2019s just a little. After all, there are no consequences for bad behavior, are there?<\/p>\n
Things are “hit and miss” with the recreational player. It is like the weekly poker game amongst a close circle of friends; sometimes you\u2019re up (in which case you won by using your superior intellect) and sometimes you\u2019re down (in which case it was pure dumb luck for the other guy). Over the long term though, things pretty much balance out. There are no great fortunes made and a great time was had by all.<\/p>\n
Then there\u2019s the pragmatist \u2013 the algorithm guy. In actual theory, there is very little difference between this guy and the idealist. The biggest difference is that pragmatist isn\u2019t afraid to call a spade a spade and slap someone down who desperately needs to be slapped down. But there is a magic subtlety in his actions that makes a huge difference to the bottom line. First, he assumes people are honest and always gives them the benefit of the doubt. Second, he responds in kind but only to what you did to him LAST\u2026 not first. This means that he has a memory, but not a long memory; he\u2019s not hampered by a lasting “first impression.”<\/p>\n
This is important when engaging a new client whom he doesn\u2019t really know yet. If it\u2019s the cutthroat, he is able to send the message that he\u2019s not a pushover and thus stop the long slide into oblivion that is the downfall of the idealist; with the recreational player, he allows for the fact that people can change and learn from their mistake; and when meeting the idealist, because they both start with the premise of honesty and there is nothing to derail their relationship, they both score the maximum points available. If you\u2019re honest with him, you can always expect the same in return but first off, you must be honest.<\/p>\n
The Wizard Behind the Curtain<\/h2>\n
- The idealist<\/em>\u00a0\u2013 This person plays with an inflated sense of morality and is honorable almost all the time.<\/li>\n
- The cutthroat<\/em>\u00a0\u2013 This person has seen the mental matrix and deduces that it\u2019s always to their best advantage to go for the big score. They give rolled up newspapers whenever they think they can, and when they don\u2019t, it\u2019s simply to lull their opponent into a false sense of security before they pounce again.<\/li>\n
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