Leadership scenarios in prisoner's dilemma game

TL;DR

This paper explores how probabilistic and strategic leadership approaches in the prisoner's dilemma can lead to more efficient and stable outcomes, with implications for leadership styles and corruption mitigation.

Contribution

It introduces a novel leadership scenario where a leader commits to probabilistic responses, improving pay-offs and stability in the prisoner's dilemma context.

Findings

Probabilistic leadership strategies outperform autocratic ones.

Repeated interactions stabilize exploitation regimes.

Maximal pay-offs occur with mixed strategies when defection benefits are high.

Abstract

The prisoner's dilemma game is the most known contribution of game theory into social sciences. Here we describe new implications of this game for transactional and transformative leadership. While the autocratic (Stackelberg's) leadership is inefficient for this game, we discuss a Pareto-optimal scenario, where the leader L commits to react probabilistically to pure strategies of the follower F, which is free to make the first move. Offering F to resolve the dilemma, L is able to get a larger average pay-off. The exploitation can be stabilized via repeated interaction of L and F, and turns to be more stable than the egalitarian regime, where the pay-offs of L and F are equal. The total (summary) pay-off of the exploiting regime is never larger than in the egalitarian case. We discuss applications of this solution to a soft method of fighting corruption and to modeling the Machiavellian leadership. Whenever the defection benefit is large, the optimal strategies of F are mixed, while the summary pay-off is maximal. One mechanism for sustaining this solution is that L recognizes intentions of F.