Thursday, April 30, 2009

Cultural Coordination Games

In game theory, a coordination game is one in which the players can achieve gains only by making consistent and coordinated decisions, and they have multiple stable "solutions" (Nash equilibria). That is to say, if everybody ends up doing the same thing, everyone wins, although there are multiple outcomes; all that matters is that everyone ends up doing the same thing.

The history of commercial electronics is rife with coordination games: in the early phases of a new technology, if there are competing standards, there is a race between manufacturers to win early market share. People bought a few more VHS recorders than Betamax, so the studios made a few more movies, so people bought a few more VHS cetera. Losing this coordination game was quite costly for Sony. Sony's Blu-Ray format won the DVD coordination game two decades later (last year), because competitor Toshiba learned from Sony's sunk-cost mistake and proactively withdrew HD DVD from the race. Video game programmers have explained to me that much the same strategy is at work with game consoles. A similar coordination game is probably coming in the near future with the cell phone protocol used in the Americas vs Europe, with many predicting that Europe's will win.

A coordination game the outcome of which is certainly affecting you as you read this is the one in the 1980s between Apple and IBM. IBM licensed its format to other companies, like HP and Compaq; Apple did not. I don't know the history of why IBM chose to do this and whether it was because they were so clever as to see the outcome - that so many more computers would be produced, and so much more software written, for their platform, that they would end up with >90% of the market. (Given the increasing popularity of mobile convergence devices we'll see if that's true in 20 years.) But it's also not hard to see how, in the early 1980s, it would have seemed a little scary to decide to outlicense your format and operating system. Mac fanatics, spare me your rant about how superior Macs are - granting for the sake of argument that this is true, and observing that PCs maintain their vast-majority share, it only reinforces how important coordination games are.

Not everything in commerce is subject to coordination games: it's hard to make an argument as to how this would affect soft drinks, for example. But the phenomenon is certainly not restricted to commerce, either. The classic example is language. From the seventeenth century through the mid-twentieth, French was the received language of diplomacy, but this has changed in the twentieth as a result of Anglo-American influence in the age of capitalism. If you're a native English-speaker, you probably welcome this development.

I welcome it not for ease of communication, but because of the spread of values. Have you ever read about a familiar historical episode in a different language than your own? It comes across differently than what you'd read before, doesn't it? Far from assuming that this is always the result of propaganda or conscious rhetoric, I think it's a simple result of writers filtering events through their own set of values - which can differ greatly between languages. Languages carry with them a freight of proverbs, literature, and most importantly values, and these are largely segregated within each mother tongue, at least in the near-term, even in the twenty-first century.

Viewed in this way, in the twentieth century our species entered into a crucial period - one where we began coordination games of both political systems as well as individual values. The two are tightly linked; the responsibilities of democracy cannot be set on top of a culture whose members are used to totalitarianism, as the United States is learning to its chagrin in Iraq. Democracies coordinate well with each other, but not with dictatorships (which often do not coordinate well with each other; hence why large wars with big alliances favor democracies.) No doubt economics, technology and politics will cause the connections between far-flung civilizations to wax and wane as the centuries pass, but the underlying connections between them - and the values that are increasingly diffusing to humans around the world will be here to stay.

At this point I'm tempted to start classifying - democracies on one hand, and theocracies, political dictatorships, and undeveloped countries with uneducated populations on the other. But this only blurs the point that there are a number of memes that threaten a positive outcome for democracy in this all-important coordination game, many of them very old and relying on well-known and -exploited short circuits in human cognition. It is up to us - and the next several generations in the democratic world - to assure that the open society is VHS and not Betmax.

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