## Thursday, April 4, 2013

### Dilemma 4: Dilemma Wagers

Dilemma Wagers

In order to “make a game interesting”, it is common to wager sums depending on the outcome of a game. Dilemma games require a dilemma gambling structure. Here is one such parley:

Gifts Parley. In this wager, each player may either give a gift to the other, or not. Giving a gift is “nice”, and so:
B:
Gives      Doesn't Give
A:                                  Gives        Truce               Lose/Win
Doesn't Give       Win/Lose         Draw

The payoff depends on the outcome of the dilemma game wagered upon. If the players truce a dilemma game, by this wager they trade gifts; if one player wins the dilemma game, that player gets both gifts; if it is a draw, then no trade. Thus a Parley card game (see below) can decide a real parley.
This parley equals a pair of bets; A gets B’s gift if A wins or truces; A keeps A’s gift if A wins or draws.
This essay began with a Gifts parley, with apples and oranges as the stakes. As then, this parley has a point only if truce (trade) is better for both sides than draw (no trade); that is so if the gifts in question are of different value to the different players. This trading dilemma arises from differential valuation; the incomparability of apples and oranges.

Other parleys are possible, such as:
Favors Parley. Same as above, but here the players may either do favors for each other or not. Thus:
B:
Does Favor     Doesn’t
A:        Does Favor           Truce               Lose/Win
Doesn’t                Win/Lose         Draw

Data Parley. Same as above, but here the players may either tell secrets to each other or not.
B:
Speaks      Keeps Mum
A:                                  Speaks      Truce               Lose/Win
Keeps Mum       Win/Lose         Draw

The above parleys have all-or-nothing stakes. This can be offset thus:

Price Parley. Two items with two different values (worse, better) are offered at two different prices (lower, higher). One of the items is sold at one of the prices. Thus this dilemma:

High Price      Low Price
Seller sells:           High Price      Truce               Lose/Win
Low Price       Win/Lose         Draw

All these parleys reduce to this most basic parley of all:

Barter. If one exchanges gifts for favors, favors for data, or data for gifts, then we get dilemma similar to the Price Parley: shall one give high value, or low?
B gives:
High Value      Low Value
A gives:                 High Value      Truce               Lose/Win
Low Value       Win/Lose         Draw

Note that these dilemma wagers encompass, respectively,  Goods, Services, News, Sales, and Exchange; basic events in any market-place. Thus we explode the myth of the “competitive Market”. The Market is not just a competition; it is a dilemma.
(See “Mutual Profit” below for the political implications of this.)