Game Theory in Nature

Game Theory in Nature:

Biologists observe that animals and even lower organisms often behave altruistically. Such behavior is obviously beneficial for the species as a whole. Although it is difficult to measure how an animal's altruistic behaviour affects its chances for survival and reproduction, theoretical research is starting to fill in the picture of how cooperation may survive natural selection. Some of the most illuminating ideas are coming from game theory, the field of mathematics that studies strategic behavior in competitive situations.

For decades, game theorists' basic paradigm for the puzzle of cooperation has been the scenario called the prisoner's dilemma, in which each player has a powerful incentive to exploit the other. The game is set up so that cooperation is best for the group, but each player individually does better by taking advantage of the other.

TIT FOR TAT: Things look rosier for cooperation in situations where a participant plays the prisoner's dilemma repeatedly with the same opponent and learns from previous games. After all, it can be risky to exploit someone you know you're going to encounter again.

A player using the tit-for-tat strategy cooperates in the first round and then in each subsequent round mimics the opponent's behavior in the previous round. In a population containing a mix of defectors and tit-for-tat players, the latter generally do better, provided there are enough of them. When they meet another tit-for-tat player, both cooperate and get a high payoff. When they meet a defector, they get suckered once, but only once. If repeatedly losing the game translates into low fitness, often the defectors do so poorly that they eventually die out, leaving an entirely cooperative population.

Ultimately, a better understanding of the interplay between cooperation and exploitation could help explain the emergence not just of cooperation but also of life itself. After all, life owes its origins to primeval acts of inanimate cooperation, in which RNA, proteins, and other molecules banded together to form cells.

"Whenever nature achieves a major step, it involves cooperation," Martin Nowak of Harvard University.

In business, things are more Tit for Tat and less prisoner's dilemma, because a player often interacts with the same opponent more than once. It is in the