Monday, May 3, 2010
You know what they say about prison snich's
Due to the Nash equalibrium, it is always safer and more profitable for companies to break there collusive agreements, or for a couple of prisoners to rat eachother out. Since the outcome of blowing the whislte on your partner in crime is more beneficial to you then not doing so, the nash equalibrium suggests that people would rat each other out. The penalty of not doing so could be very detrimental if your partner rats you out. The main thing that makes the Nash equalibium a tricky thing though, is that it assumes that neither party has any way of knowing for sure what the other party is doing, or will do. Its based on which course of action hurts you the least assuming your partner acts in their own best interests.
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