----------------- HES POSTING ----------------- I just returned from a vacation and wanted to add a comment to those advanced by others on the origin of the prisoner's dilemma argument and its uses in the social sciences. One of the earliest and clearest appreciations of the Prisoner's Dilemma is in Hobbes' writings, and especially the Leviathan. Here he refers to a law of nature that individuals in a state of nature are compelled by their emotional fear of sudden violent death to employ reason to find a way out of their awful situation. It is discovered that it is rational to lay down a person's claims to all things and the bodies of other persons but only on the condition that each has an adequate reason to believe that others will behave the same way. In the absence of such mutual assurance each person is permitted (that is, authorized by natural law) to use all methods of warfare including force and fraud. Fraud means that one might fake a willingness to lay down such claims to goad the other player into doing so first and thereby conquering and grabbbing away his possessions. The cheater's payoff in the P/D model. In the absence of such reassurance that others will keep their mutual promises, the state of nature remains as Hobbes described it ---nasty brutish and short. Each play er remains armed to the hilt afraid to lay down his arms. In the state of nature we have a status quo solution---the stubborn Nash equilibrium. The logic of the P/D haunted Hobbes and led him to realize that only with the appearance of a sovereign power ( a awesome actor who has not entered into any mutual agreement with the "prisoners" and stands outside the contract with the intent and power to keep all men and women to their promises) does it finally become psychologically safe for the isolated individuals to exit form the state of nature and enter into society. Hobbes writes of a commodious life (a prosperous life) becoming finally an option but only after a sovereign power is established to keep all men and women to their promises. Hobbes did not explain why the sovereign power would be motivated to provide the conditions for a market-style prosperity with laws favoring the toleration of foreign merchants, agricultural investments encouraged by property rights, cultural achievements and transportation innovations (map making is referred to) but these details about the rational dictator were added later by members of the Public Choice school such as Buchanan, Tullock and most recently by Olson in his last and very stimulating book "Power and Prosperity" and applied most creatively to the Russian state in our time. Since trusting someone to lay down his arms when he is deceiving you about his true intentions with rhetoric and skilfull gestures carries with it a death-sentence payoff, this sort of P/D ---the one dramatized by Hobbes in his writings---cannot be escaped by repetition and the adoption of "tit for tat" strategies. Neither will better methods of verbal communication between the "prisoners" solve the problem since the whole point of the State of Nature is that force and fraud are welcomed devices for prolonging life and actors can fake their words (Hobbes's example of the "fool" explores this logic). Promises are but words or tools for "utlility maximization" and not true indexes of human plans and motivations. For the record I want to insist that a similar appreciation of the P/D problem informs Hume's Treatise. Hume (following Hobbes but not acknolwedging his debt to Hobbes for practical reasons) distinguished between what voluntary agreement (tacit assent) could achieve in small groups compared with large groups. This distinction between what is possible in small groups and why what is possible in small groups is not possible in large groups is crucial to certain strands of thought in modern economics from problem surrounding the "core" in competition theory, to the origin of public choice economics, bargaining costs, to an appreciation of certain types of transaction cost economics. In large groups, a strong central power is needed in both in Hume and in Hobbes--- voluntary contracting or tacit assent will not work in large groups because reputation effects become difficult to detect! Adam Smith continues these discussions in several places including his Lectures as well. I can send anyone who is interested some essays that I wrote on these subjects published several decades ago but I still remain interested in this strand of thinking in economics. I had a short correspondence with Mancur Olson on some of these issues about Hobbes and the P/D problem. Olson like Jim Buchanan extends Hobbes' scientific approach in new directions making a more inclusive social science possible. Obviously, if we take a broader view of economics as dealing with the structures that make market trading possible and promise-keeping credible, then it is not difficult to push the origins of modern economics back to at least Hobbes and possibly earlier still depending always on definitions of what economics as a social science is all about. As Jevons, Weber, Mises and others have maintained economics is part of a broader sociology and the boundaries between the "disciplines" are fuzzy and always worth rethinking and perhaps redrawing. Laurence S. 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