The Prisoner's Dilemma In Business Competition


By Tino Buntic


Have you heard of the "prisoner's dilemma?" It is a situation where two people are apprehended as suspects for a major crime. They are separated from each other and interrogated. There are two options available to each of the two suspects:

1. Don’t admit to the crime. If each person refuses to talk, each will get one year in prison.

2. Admit to the crime. If one prisoner admits to the crime and implicates his partner, he gets off free and his partner must spend five years in prison.

A problem for each of the two prisoners exists if both admit to the crime. In that case, both suspects would receive a three prison sentence.

The best possible overall scenario would be for each prisoner not to confess to any crime. In that case there would be a combined total of two years in prison (One year for each suspect). Option 2 would result in a total of five years in prison (Five years for the first suspect and zero years for the second suspect). If each suspect admits to the crime it would result in a combined six year sentence (three years each).

The prisoner's dilemma is an example of where acting in one's self interest does not always serve one’s self interest. Greed, too often, gets the better of ourselves. This often happens in the business world, too. Just take Enron or Tyco, for example.

Business competition is great and healthy for the economy as a whole and great within individual businesses; it fosters innovation, growth, and profits. But, with many people being individualistic it can cause problems, just as in the prisoner’s dilemma.

Take, for example, two top salespeople in a company's sales department. Let's say that each one is so driven to succeed that they'll do anything to achieve their goals and outdo eachother. Normally, the salesperson with the best numbers (most sales leads, most appointments, most referrals, most closed sales) would be seen as the top performer. But, being jealous, they both decide to sabotage eachother's performance, eachother's numbers, and they continuously talk trash behind eachother's backs (office gossip). This happens in countless organizations, be it in executive management, the customer service department, the accounting department, or even the marketing department. I think we would all agree that if they co-operated, each of these two salespeople would be better off; I think the two salespeople would agree too. Yet it happens. Our jealousy and self interest, too often, gets in the way of what would be better off for ourselves and the companies that we work for.

We must remember the golden rule when it comes to business competition, as taught by the prisoner's dilemma: Acting in one’s self interest does not always serve one’s self interest.

Create a professional business profile Tino Buntic's TradePals to receive free B2B and B2C sales leads without cold calling or prospecting. The website can be found at: http://www.trade-pals.com


More Resources

Unable to open RSS Feed $XMLfilename with error HTTP ERROR: 404, exiting

More Ethics Information:

Related Articles

Top 10 Principles for Positive Business Ethics
This morning, I read about a company using on-line auctions to defraud customers. Last week, I consulted on an ethics complaint where a business coach betrayed a client's confidentiality.
Business Ethics: An Oxymoron?
Why do I believe good PR and business ethics are inextricably linked? It comes down to definitions. Ethics is learning what is right and what is wrong and then doing the "right thing.
The Everyday Business Ethics Crisis Or Im Mad as Hell and Not Going to Take it Anymore
Breaking news may feature the Enron debacle, WorldCom activities, or accounting problems but we live our everyday business life making ethical choices that affect our employment and businesses. Consider the ethical choices made in these situations:-A restaurateur hired a firm, used the firm's ideas, benefited from them and refused to pay for the services rendered.
No Credit is Due: Bad Telemarketing
Just a few minutes ago I was debating what to write about this week -- something interesting, perhaps, or maybe it was about time to give some credit to snails, I thought. Then, by some random stroke of luck, fate or writer's lightning (a term I created just now), I received a phone call from a credit card company.
The Social Implications of Computing
Directed by Mark Harrison, "Visions of Heaven and Hell" is a three-part cautionary tale come documentary commissioned by Channel Four, that warns of the impending infiltration of technology and pessimistically endeavours to communicate the sentient of an old Buddhist proverb which states "To every man is given the key to the gates of heaven; the same key opens the gates of hell." and within computerisation lies such a key thought a dismal set of apprehensive predilections.
Ethics in Business - Please Have Some
Is your business ethical?What I mean is "Does your business do the rightthing when faced with that decision?" It's asimple question, which many businesses strugglewith. I just don't understand the struggle part?I have worked for companies that believed they wereethical, and really have no clue.
The Collapse of Enron: Managerial Aspects
Executive summaryIts revenues made up US $139($184) billion, assets equaled $62($82) billion, and the number of employees reached more than 30,000 people in 20 countries around the world.While Enron Corporation was so highly praised by the outside observers, internally it had highly decentralized financial control and decision-making structure, which made it practically impossible to get coherent and clear view on corporations' activities and operations.
Minding Your Global Manners
To say that today's business environment is becoming increasingly more global is to state the obvious. Meetings, phone calls and conferences are held all over the world and attendees can come from any point on the globe.
Do Organizations Serve Us Or Do We Serve Organizations
We have seen an erosion in the confidence that society has in organizational leadership and its integrity recently with the numerous accounting scandals that have become public.Clearly this has led to the demise of several large organizations.
Enron's Ultimate Victim: Ethics
FROM the 'MORAL HIGH GROUND', where we imagine ourselves, the Enron fiasco should have come as no surprise. Enron is simply a quintessential example of the degradation of principles such as trust, loyalty and ethical standards.
The Armaments Industry and Holy (?) Roman Emperors
"The time for fixing every essential right on a legal basis is while our rulers are honest and ourselves united. From the conclusion of this war we shall be going down hill.
The Only Thing You Get for Free in Life is Hungry!
My grandfather was a very wise man. Simple but wise.
Business Ethics
There is much talk today about ethics in business - as there should be, but there should be more than talk; there should be a high moral code for all executives who are responsible to both their customers and their shareholders.I have been the president and CEO of one publicly owned company and also was president of another that was responsible to customers who traded equities.
Laws and Ethics?. Who's Kidding Who?
Years ago I read an article by a renowned psychologist wherein he wrote his studies found one percent of all human beings would never lie, cheat or steal. One percent would always lie, cheat or steal and given the right set of circumstances, the rest of us would likely lie, cheat and/or steal.
Brain Development and Due Process
DUE PROCESSAfricans, especially Nigerians are stereotyped on the internet and offline in foreign countries as corrupt, cheats and thieves.Whenever I have to introduce myself to foreign contacts, whether online or offline, I must make visible effort to prove my contact wrong, because he or she instantly sees me as a scammer-419, another Nigerian cheat or thief.
Better Business Boundaries
To get a new client, we might be inclined to make concessions no matter what the cost: offer a second or extra long sample session; reduce fees; set session times we don't want to work. We might leap at any opportunity before looking at the possible return on investment of time.
Business Ethics: An Oxymoron
An oxymoron: the juxtaposition of contradictory words or concepts. That is what we have with the term "Business Ethics".
Vice of Buggery at FTC
At the Federal Trade Commission we have seen attorneys who suffer from the vice of buggery get promoted to higher and more important international divisions. Now then, are these attorneys who have personal sexual problems and are breaking the laws of sodomy not wanted in the main group of Federal Trade Commission Employees? Is the FTC worried about sexual harassment laws? Are they worried about on-the-clock Men's Restroom "Quickies" and the possibility of the need for an unflattering in-house employee investigation becoming public? Is the Federal Trade Commission afraid to fire these buggerists, for some employee unlawful termination suit? Is buggery so pervasive that the FTC has to invent new titles for these guys so they can be moved up in rank to other divisions? If so why doesn't the FTC adopt a "Don't Ask, Don't Tell Policy" to prevent special treatment of those who suffer from buggery? Can't the FTC get psychological help for these men who thrust their penis up another man's rectum? Obviously these human organs were not set up to do that.
Work Ethics - A Paradigm Shift
Work ethics is a hot topic in today's business and educational worlds. Yet, how do we define this hybrid phrase with the word work meaning more than a specific outcome and the word ethics being more than the values that enhance that outcome?When we say we are going to work, work becomes the place of employment.
Six Reasons to Give
If you run a business, you undoubtedly feel many pressures on your time and money. Why would you want to add "giving to the community" to your "to do" list? Here are six reasons .