Private Games are too Dangerous

Abstract

Given the difficulty of observing interpersonal relations as they develop within an organization, I use iterated prisoner&2018;s dilemma games to simulate their development. The goal is to understand how trust could develop as a function of private games, that is, as a function of interaction sequences between two people independent of their relationships with other people. My baseline is Axelrod&2018;s results with TIT for TAT showing that cooperation can emerge as the dominant form of interaction even in a society of selfish individuals without central authority. I replicate Axelrod&2018;s results, then show that the results only occur in a rare social context&2014;maximum density networks. Where people form less dense networks by withdrawing from unproductive relationships, as is typical in organizations, the competitive advantage shifts from TIT for TAT to abusive strategies. A devious PUSHY strategy wins in moderate to high density networks. A blatantly HOSTILE strategy wins in less dense networks. Abusive players do well in sparse networks because their abuse is lucrative in the initial exchanges of a relationship&2014;before the other person knows to withdraw. Wise players avoiding the abusive players leaves the abusive players free to concentrate on naive players (con men thrive in big cities). The implication is that what keeps abusive players at bay are friends and acquaintances warning managers away from people known to exploit their colleagues. I reinforce the point with illustrative survey data to conclude that private games are not only too dangerous, but also too rare and too slow to be the foundation for trust within organizations. The results are an evidential call for the sociological intuition that trust and distrust cannot be understood independent of the network context in which they are produced.