Maximizing Profits

I really enjoyed the activity that we did in class on Monday. I thought it was interesting how many aspects and strategies there were involved in this game. I feel like for the first few rounds, each round was basically its own independent single game. By not being able to communicate with the opposing team it made it very difficult to anticipate their next move. Since the objective of the activity was to maximize profits it made sense that many of the teams agreed on making the “equilibrium” choice of staying closed and maximizing profits of each company. I feel that there was a very logical reason for some teams choosing to not take this route. I feel the reason for this is because even though we were told that the objective of the game is solely to make the most money, many people could not resist the temptation of seeing this as a competition and as a result made decisions in a way to “beat” the other team. It was intriguing to see that the result of this strategy tended to be that both teams made substantially less money. Another major aspect of this activity was when it came down to the last turn. I feel that even if the agreed strategy was to both stayed closed, it would be illogical to stay closed during this turn. It seems illogical (or logical) to both stay open or closed, this is so because of the uncertainty of what the opposing team is going to do. Without the knowledge brought about by collusion, this brings about the prisoners dilemma scenario. I understand the mathematical reasoning behind cooperation being the appropriate choice in an economic sense but I have trouble accepting the notion that the appropriate thing to do is cooperate when the other party’s decision is unknown. For this reason I feel that this kind of invalidates what we know about decision making in these types of situations. And because of this I think that even though you can make a decision based on mathematical evaluation or decision trees, decision making really comes down to luck and chance.