Game Theory, Trucking Problem, Cooperate vs. Compete

“Competition has been shown to be useful up to a certain point and no further, but cooperation, which is the thing we must strive for today, begins where competition leaves off.”

–          Franklin D. Roosevelt

Should you cooperate or compete? Which strategy gives better returns? Game theory tries to answer these questions.

Moran Deutsch and Robert Krauss designed game called – Trucking Game or Trucking Problem. The purpose of game is to learn bargaining and negotiations and benefits of cooperation over competition.

The game consists of competition between two logistics companies- Acme and Bolt. Purpose of each company is to make profit. Two players act as CEOs of the companies. Every time a truck reaches destination within time limit it gets points. To reach destination there are two routes- long route and short route. Short route helps in reaching destination faster, hence more points, while longer route takes more time therefore fewer points. So each company will prefer shorter route. But there is a catch, only one truck can pass through road and at the ends of the road there are gates which are controlled by one of the companies. So rival can prevent competitor’s truck from reaching destination by not opening the gate which is under their control or both companies release their trucks at same time creating road block, which can be cleared only of one of the trucks goes in reverse and allows other truck to pass.

game

All these tactics means there is delay in reaching destination, hence less points.

During initial phase the players are not allowed to communicate with each other, only chance to communicate/negotiate comes when rival’s truck reaches gate. In later phases players can communicate with each other.

When this game was played multiple times, it was found that when two players refused to communicate, did one sided negotiations, created barriers for rival, both companies did not make money. Non-cooperation resulted in loss for both. It was only when they opened communication channels, got into collaboration mode, and exhibited effective negotiation skills (win-win) that both started making money.

cartoon

In one version the players were given option of removing gate under their control, so that rival’s truck will have unrestricted access to destination. Least gain was made when there were two gates, while maximum gain was made when both the players removed gates giving access to each other.

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