Symmetry warrants rational cooperation by co-action in Social Dilemmas

TL;DR

This paper introduces the co-action equilibrium as a new framework for analyzing social dilemmas, showing that rational selfish agents can naturally cooperate without extra mechanisms, resolving the Prisoner's Dilemma.

Contribution

It proposes the co-action equilibrium paradigm, contrasting with Nash equilibrium, to explain how cooperation can emerge as a rational outcome in social dilemmas.

Findings

Co-action equilibrium leads to better collective outcomes.

Rational agents adopt cooperative strategies in social dilemmas.

The Prisoner's Dilemma can be resolved within this framework.

Abstract

Is it rational for selfish individuals to cooperate? The conventional answer based on analysis of games such as the Prisoners Dilemma (PD) is that it is not, even though mutual cooperation results in a better outcome for all. This incompatibility between individual rationality and collective benefit lies at the heart of questions about the evolution of cooperation, as illustrated by PD and similar games. Here, we argue that this apparent incompatibility is due to an inconsistency in the standard Nash framework for analyzing non-cooperative games and propose a new paradigm, that of the co-action equilibrium. As in the Nash solution, agents know that others are just as rational as them and taking this into account leads them to realize that others will independently adopt the same strategy, in contrast to the idea of unilateral deviation central to Nash equilibrium thinking. Co-action equilibrium results in better collective outcomes for games representing social dilemmas, with relatively "nicer" strategies being chosen by rational selfish individuals. In particular, the dilemma of PD gets resolved within this framework, suggesting that cooperation can evolve in nature as the rational outcome even for selfish agents, without having to take recourse to additional mechanisms for promoting it.