In the previous article, I explained how in any game, it is reasonable to assume that a stable outcome will be a Nash Equilibrium. Today, I will show how it is impossible for rational people like us to save the planet by cooperating to stop using carbon fuels.
Currently, as things stand, carbon fuels definitely have an edge over traditional fuels. As of now, they are cheaper, and they can deliver more power than automobiles that run on eco-friendly sources like electricity. (Let us ignore for the moment the truth that electricity is largely produced using carbon fuels!)
If it weren’t for the fact that the large scale use of carbon fuels in our automobiles is destroying the environment, life would be great. Sure, they’ll run out someday but not in our time. In the world of game theory, each person is uniquely selfish. We’re not caring about future generations here. By the time our great-grandchildren realize that the earth has no more fuels, we won’t be around to face the consequences.
Also, we need to keep in mind the fact that one person using eco-friendly fuels is not going to save the environment. Concordantly, if everyone else is using eco-friendly fuels, then one person using carbon fuels isn’t going to destroy the environment either.
It’s also true that if you’re the only one using carbon fuels, you gain a massive advantage over everyone else. You reach your workplace faster, and you can perhaps even rob a bank and get away, as the police will not be using carbon fuels, and hence can’t keep up with you.
Conversely, if you’re the only one to use eco-friendly fuels, you will get creamed personally (babes stay away from you) as well as professionally (more time to reach a client, you have to stay closer to work, etc).
So let’s split the population into two segments. You, and everyone else. There are two choices for each segment. Using eco-friendly fuels, and using carbon based fuels. The diagram above shows the possible outcomes for each situation where each both parties have made their choices.
What should you do if everyone else is using eco-friendly fuels? Should you use them too? No! As the environment will still be saved if you use carbon-based fuels and you get an advantage over everyone else, you must use carbon-based fuels if everyone else is using eco-friendly fuels.
Suppose everyone else uses carbon fuels, then should you use eco-friendly fuels? Of course not! Why should you? It’s not as if the earth will be saved just because you choose to use eco-friendly fuels. And if you’re the only one not using carbon fuels, you’ll be a loser compared to everyone else.
Therefore, for you, using carbon fuels is a dominant strategy. This means that it’s a strategy that makes you better off no matter what the other party is doing.
This logic of course holds true for everyone else as well. The outcome is that, each person behaving rationally dooms the earth collectively. This counter intuitive result where rational decisions lead to disaster is commonly known as the “Prisoner’s Dilemma.” There’s no way that we can save the earth if the only solution is cooperation.
The prisoner’s dilemma can be overcome if there is a law against carbon fuels. This way, the cost of using carbon fuels goes up (as the law can punish you), and the payoffs in the diagram change.
There is another solution to the prisoner’s dilemma. Game theory assumes that everyone is rational. However, people don’t think rationally. I certainly don’t. I use a bicycle instead of a car because of an illogical and stupidly misplaced sense of civic duty. I feel that my actions actually have an effect on the environment when they really don’t. The paradox is that when everyone behaves illogically, it is possible for a good outcome to ensue!
So maybe rationality isn’t all that it’s hyped up to be. We will explore this idea in later articles where I will show that nature has deliberately made us illogical precisely for the purpose of avoiding the Prisonner’s Dillemma. There is hope for our planet after all!