Aug 2nd 2010 9:33AM 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.
Aug 2nd 2010 9:25AM Obviously the literal, pure "two people who will never interact again" version of the Prisoner's Dilemma never happens, but sub-games and derivations of it happen all the time.
The Glyph Market is in fact a good example. If you undercut your competition, you can expect them to undercut you, and so on until glyph prices hit the floor and you both make less money. On the other hand if you *don't* undercut the competition, you'll make no money anyway, because nobody will buy your glyphs.
In this case sure, you could get together with your competitors and fix the market, but you'd have to do it with every other glypher on the server and if one of you breaks the deal, glyph prices start dropping.
It's simply how competition *works*. And it's not even a bad thing, necessarily. There's a reason we have antitrust laws.
Aug 2nd 2010 5:59AM 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).