In the strategy class today, we played an interesting simulation game for a fish market. 3 groups were to quote their fish quantity such that their respective profits are maximized. When I and everyone in my group did the homework, we knew the correct number was 33. Somehow, one of the other groups kept playing with a 50, and the third one kept throwing random high numbers between 65 to the maximum allowed number of 75.
And this went on for 12 rounds.
We have varying conclusions for this behavior. One way to think about it is that the other groups had not done their homework. The ones playing with 50, may have a excel geek amongst them, who quickly came up with the number 50, which gives equal but lesser profit for all. The ones playing with high numbers though, clearly gave a signal that they have not done any prior calculations or were not doing them even during the game.
I know I should not accuse anyone and I am not trying to do so. But then, if we are to assume that everyone had done their homework and knew that if 3 of us each put a 33, we all get same money and the best profit, then there can be only one justification for this entire game. No matter how much the professor stressed that the goal is to maximize our individual profit without caring for what others get, people were just not able to overcome their tendency to lose the share of their own profit, just to see others earn lesser. They were ready to earn only 500 instead of 670, just to see us earn 450.
While the game was so simple, it gave an important lesson to us today - "People are not rational in competition".
And this went on for 12 rounds.
We have varying conclusions for this behavior. One way to think about it is that the other groups had not done their homework. The ones playing with 50, may have a excel geek amongst them, who quickly came up with the number 50, which gives equal but lesser profit for all. The ones playing with high numbers though, clearly gave a signal that they have not done any prior calculations or were not doing them even during the game.
I know I should not accuse anyone and I am not trying to do so. But then, if we are to assume that everyone had done their homework and knew that if 3 of us each put a 33, we all get same money and the best profit, then there can be only one justification for this entire game. No matter how much the professor stressed that the goal is to maximize our individual profit without caring for what others get, people were just not able to overcome their tendency to lose the share of their own profit, just to see others earn lesser. They were ready to earn only 500 instead of 670, just to see us earn 450.
While the game was so simple, it gave an important lesson to us today - "People are not rational in competition".
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