For what it's worth the original post actually misstates the Prisoner's Dilemma.

The point of the Prisoner's Dilemma isn't that in trying to screw your opponent you screw yourself, it's that in trying to secure what is best for yourself, you screw your opponent.

It doesn't matter *what* you assume your opponent will do, defecting on the deal is always the right solution. The only way out of the dilemma is to actually *genuinely* value the other person's comfort *more than your own*.

Same goes for undercutting the glyph market. People don't undercut each other in order to make their competitors make *less* money, they undercut in order that they, themselves, can make *more* money. Now the whole thing winds up being a lot more complicated than the classic dilemma but the same principle applies.

These sorts of situations actually do come up all the time in real life (tragedies of the commons are even more common).

"It doesn't matter *what* you assume your opponent will do, defecting on the deal is always the right solution."

If you define "right" in a certain mathematical way. The thought experiment does make sense in its own way, although it's easy to miss the point of it.

"The only way out of the dilemma is to actually *genuinely* value the other person's comfort *more than your own*."

Which may be considered "right" by some standards.

I understand the purpose of the experiment, however I do not agree that everything can be boiled down to some sort of utilitarian/mathematical version of "rightness."

"These sorts of situations actually do come up all the time in real life"

Usually, for the sake of making the point, idealized scenarios assume an unnaturally ideal set of circumstances. A "sort" of situation may crop up in real life, but rarely is it so idealized that you have to resort to blindly following the mathematical description of the dilemma.

It *does* serve to show that what is best for the individual may not be always be best for the entire group, which is true. Selfishness may not always result in behavior that is ideal for the entire group.

I see where you're coming from, but I think you're missing the basis of the theory.

Of course there are lots of situations where cooperation is the right answer. If you're in a criminal gang, and you know you'll be killed if you rat, it's best to keep quiet, but all that does is shift the parameters of the game.

But if you're talking about making gold in WoW, the "right" thing to do is the thing that makes you the most gold. Yes, it might upset your competitors if you take away their customers, but it's better for the customers because they get cheaper glyphs.

You say "prisoner's dilemma" and people assume it has to be a bad thing, it doesn't.

"If you're in a criminal gang, and you know you'll be killed if you rat, it's best to keep quiet, but all that does is shift the parameters of the game."

. . . and of course what is best for a small group or individual (ie, the gang or yourself) may not be what is best for the larger community (ie, the city). A larger thought experiment could be done where risking your life saves several lives.

In any case, I'm not paying too much attention to the actual use of the dilemma in the WoW example, so I'm probably way off track, lol.

/me looks . . .

Oh yes, lol, a twisted version indeed. One where cooperation can help the sellers but hurt the buyers.

I think too many people leave the buyer out of the puzzle when trying to claim that undercutting hurts more than it helps. Unfortunately that *is* something that happens in real life with oligopolies and monopolies. Sellers work together, resulting in high prices and hurting the buyers.