# Game Theory

INspired by this thread and an Adam Curtis documentary I once saw, I think it was The Trap. According to the documentary a paranoid schizophrenic maths genius at RAND who believed everyone in a red tie was part of a communist conspiracy developed game theory which was later used to justify cut throat military and economic policies. He later saw the error of his ways but at the time he was confused by the irrational actions of the secretaries he tested his theories on.

He asked them this: you’ve stolen a gem worth a million dollars and you’re trying to fence it to the mafia. However you don’t want to meet the mafia guys so you do a deal on the phone, because they presumably just accept your word that you’ve got the massive gem, and you agree to leave the gem in a hidden place, they leave the money somewhere else then you each go and get your dues. Then, hanging up the phone, you realise you could betray him, go and get the money he’s left, and keep the gem. At the same time you realise he could be thinking the same thing. So, what do you do? Betray him and keep the gem and go and look for the money, which he may or may not have left there or trust him and leave the gem in the agreed place?

The correct answer was to betray him, so best case you get the money and the gem, worst case you’ve still got the gem whereas the alternative is best-case get the money worst case get nothing.

Of course this ignores the fact that the whole point of the deal is that you want to get rid of the hot gemstone whereas if you betray the gangster you’ve got a gemstone the police are after and the mafia trying to hunt you down to.

So which do you do?

There are 4 possible outcomes based on a single decision on your part:

A) Keep Gem + Cash
B) Keep Gem + No Cash
C) Lose Gem + Cash
D) Lose Gem + No Cash

Assuming a likely probability of each event and an equal value of cash + gem, the value of each outcome is:

Keep Gem
A) 2 x 50%
B) 1 x 50%
=total expected return = 1.5

Lose Gem
C) 1 x 50%
D) 0 x 50%
=total expected return 0.5
Decision: Keep the gem.

The results can change though if the value of getting rid of the gem exceeds the value of keeping it or if we assign a value to angry mob reprisals.

What if you keep the gem and go looking for the money but they are lying in wait at the drop site so they can kill you and take the gem?

You have got a stolen gem on your hands and you are going to have to get rid of the damned thing anyway one way or another at some point. This seems to be the best deal you have going so you better just do it right away. Even if you take the money successfully and keep the gem, the quality of your like will suffer because they will be looking for you forever basically. Have faith that their code of business will prevail. At least you will have one less stolen gem on your hands.

I’d give considerable weight to the heretofore unmentioned “gangsters might kill me if I fuck them over” possibility.

Some of my family members are actually FAMILY members. I know how they think.

You’d be much better off leaving the gem even if they don’t leave the money. However, if you find no money at the sight where you expected it, get in touch with the Guys In The Fedoras and let them know about it. It’s far likelier that someone else stole the money, and the GITF will want to know this, as most of them do have a code of honor, and if they say they’ll do something, they WILL do it.

Keep the gem. The whole point of stealing the gem in the first place was to make money on it. So in the worst case scenario, you keep the gem and don’t get the money…yet. Try again in a few years with a different mafia family. Keep doing this until you get the money, then either continue the scam, or simply dispose of the gem when you feel like you’ve made enough money.

Assuming I was the sort of person who would steal the gem, I’d make the trade.

First, as others have said, the point of stealing the gem is to sell the gem. You might as well sell it to the people you know want to obtain it.

Second, if the Mafia does scam you, they are at least more likely not to come after you out of revenge. The difficulty of stealing a new gem is at least a somewhat known quantity and in your area of expertise, while dealing with the Mafia’s attempts at vengeance may be more difficult.

Third, even if you want to scam somebody to get the money without parting with the gem, you can pull the exact same scam even if you don’t have the gem. Covertly selling it to one buyer and then scamming a second will work just as well as covertly scamming one buyer then selling it to a second.