game-theory-tit-for-tat

• Navigating workplace relationships and conflicts
• Building long-term business partnerships
• Handling negotiations with repeat interactions
• Designing reputation and trust systems
• Managing team dynamics
• Resolving ongoing disputes

```

Tit for Tat Rules:

┌─────────────────────────────────────────────────────────────────┐

│ │

│ RULE 1: COOPERATE first │

│ Start every new relationship with trust │

│ │

│ RULE 2: MIRROR their last move │

│ If they cooperated → Cooperate │

│ If they defected → Defect │

│ │

└─────────────────────────────────────────────────────────────────┘

```

```

Why TFT Wins:

┌──────────────┬───────────────────────────────────────────────────┐

│ NICE │ Never defects first │

│ │ Starts with cooperation and good faith │

├──────────────┼───────────────────────────────────────────────────┤

│ RETALIATORY│ Immediately punishes defection │

│ │ Prevents exploitation │

├──────────────┼───────────────────────────────────────────────────┤

│ FORGIVING │ Returns to cooperation after one punishment │

│ │ Enables recovery of relationships │

├──────────────┼───────────────────────────────────────────────────┤

│ CLEAR │ Pattern is easy to recognize │

│ │ Opponents learn cooperation is rewarded │

└──────────────┴───────────────────────────────────────────────────┘

```

```

Prisoner's Dilemma Payoffs:

Partner's Choice

┌─────────────┬─────────────┐

│ COOPERATE │ DEFECT │

┌──────────┼─────────────┼─────────────┤

Your │COOPERATE │ Win-Win │ You Lose │

Choice│ │ (3, 3) │ (0, 5) │

├──────────┼─────────────┼─────────────┤

│ DEFECT │ You Win │ Lose-Lose │

│ │ (5, 0) │ (1, 1) │

└──────────┴─────────────┴─────────────┘

In single games: Defection seems better (5 > 3)

In repeated games: Mutual cooperation wins (3+3+3... > 5+1+1...)

```

Step 1: Assess the Interaction Type

```

Is TFT appropriate?

Repeated interaction?

├── YES → TFT applies

└── NO → One-shot game (different strategy needed)

Shadow of the future?

├── Will interact again → TFT works well

└── No future interaction → Less effective

Can they observe your response?

├── YES → TFT signals clearly

└── NO → Communication needed

```

Step 2: Determine Your Starting Position

```

First Move Decision:

New relationship?

└── COOPERATE (be nice)

Existing relationship?

├── Their last action was cooperative → COOPERATE

└── Their last action was defection → DEFECT (once)

After punishment?

└── If they cooperate again → COOPERATE (forgive)

```

Step 3: Execute and Communicate

| Situation | Action | Communication |

| ---------------- | --------- | --------------------------------------- |

| New relationship | Cooperate | "I'm starting with trust" |

| They cooperated | Cooperate | Reinforce positive cycle |

| They defected | Defect | "This response is to [specific action]" |

| After punishment | Cooperate | "Let's move forward" |

After analyzing a situation, document as:

```markdown

Situation: [Description]

Date: [Date]

Relationship Assessment

| Factor | Status |

| --------------------- | -------------------------------------------- |

| Repeated interaction? | Yes/No |

| History | [Cooperative/Mixed/Adversarial] |

| Their last move | [Cooperate/Defect] |

| Current state | [In good standing/Punishment phase/Recovery] |

Recommended Action

Action: [Cooperate/Defect]

Rationale: [Based on which TFT principle]

Communication Plan

If Cooperating:

• [What to say/do]
• [How to reinforce positive dynamic]

If Defecting (Retaliating):

• [Specific response to their defection]
• [Clear signal that cooperation will resume if they cooperate]
• [Avoid over-punishment]

Exit Conditions

| If They... | Then I... |

| --------------------- | ---------------------------- |

| Return to cooperation | Immediately forgive |

| Continue defecting | Continue matching |

| Escalate | [Boundary for disengagement] |

```

Workplace Relationships

```

Scenario: Coworker missed deadline affecting your work

TFT Response:

Be Nice (initially):

├── Assume competence and good faith

├── Give benefit of doubt first time

└── Don't preemptively retaliate

Be Retaliatory (this incident):

├── Address directly: "The report wasn't sent as agreed"

├── Ask what happened

├── Set clear expectation for next time

└── Don't let it slide (prevents exploitation)

Be Forgiving (after):

├── Once addressed and they commit to improve

├── Drop the issue completely

├── Don't bring it up in future interactions

└── Don't hold a grudge

Be Clear:

├── Your response should be predictable

├── They should know: cooperate = good, defect = consequences

└── Make pattern obvious so they can adjust

```

Business Negotiations

```

Scenario: Partnership negotiation

TFT Approach:

Opening (Nice):

├── Make first good-faith offer or concession

├── Signal you want win-win outcome

└── Don't start with extreme position

Response to Their Move:

If they make reasonable offer:

└── Match with reasonable counter

If they lowball aggressively:

├── Match their firmness

├── Don't concede further

└── Show you won't be exploited

Recovery Path:

├── Moment they move to reasonable position

├── You move to reasonable position too

└── Signal: cooperation = path to deal

```

Personal Relationships

```

Scenario: Friend cancelled plans last minute

TFT Application:

Nice (default):

├── Assume good reason

├── Don't catastrophize

└── Be understanding this time

Retaliatory (if pattern emerges):

├── Set boundary: "When plans change last minute, it affects me"

├── Communicate clearly

├── Reduce investment in future plans with them

Forgiving (if they adjust):

├── When they make effort to be reliable

├── Immediately return to full engagement

├── Don't "echo" past cancellations

Handle Noise:

├── Clarify intent before retaliating

├── "When you cancelled, was something wrong?"

├── Miscommunication shouldn't start death spiral

```

1. Noise Problem

```

The Death Spiral:

Misunderstanding occurs:

├── You cooperated, they perceived defection

├── They defect in response

├── You defect in response

├── Alternating defections continue

└── Both lose, neither recovers

Solution: Generous Tit for Tat

├── Occasionally forgive defection (10% random)

├── Breaks accidental cycles

├── Better in "noisy" environments

└── Communicate to clarify perceived defections

```

2. Credibility Problem

```

The Punishment Paradox:

After they defect:

├── TFT says: retaliate

├── But: retaliation is costly to you too

├── Rational choice: forgive and return to cooperation

└── If they know this, threat isn't credible

Solution: Commit to retaliation

├── Make punishment automatic

├── Reputation for following through

├── Short-term cost for long-term credibility

```

| Variant | Modification | Best For |

| -------------------- | --------------------------------- | -------------------- |

| Generous TFT | Randomly forgive some defections | Noisy environments |

| Tit for Two Tats | Only retaliate after 2 defections | Cautious approach |

| Suspicious TFT | Start with defection | Hostile environments |

| Gradual TFT | Escalating punishment | Repeat offenders |

| Method | Combined Use |

| ----------------------- | --------------------------- |

| Five Whys | Why did they defect? |

| Loss Aversion | Defection = loss framing |

| Trust Psychology | TFT builds/maintains trust |

| Negotiation | TFT as negotiation backbone |

| Conflict Resolution | Framework for de-escalation |

```

TIT FOR TAT DECISION TREE

New interaction?

└── COOPERATE (be nice)

They just cooperated?

└── COOPERATE (reward)

They just defected?

├── DEFECT once (retaliate)

└── Then if they cooperate → COOPERATE (forgive)

Unclear if defection was intentional?

├── COMMUNICATE first

└── "Was that intentional?" before retaliating

Stuck in defection cycle?

├── Unilaterally cooperate once

├── See if they break cycle

└── If not, reassess relationship

```

When applying TFT, consider:

1. What's your primary goal?

- Repair relationship (break death spiral)

- Build new partnership

- Navigate competitive environment

1. How noisy is your environment?

- High noise → Use Generous TFT

- Low noise → Standard TFT works

1. Individual or group?

- 1:1 → TFT works well

- Group → More complex dynamics

• [The Evolution of Cooperation - Robert Axelrod](https://www.goodreads.com/book/show/366821.The_Evolution_of_Cooperation)
• [Veritasium: The Prisoner's Dilemma](https://www.youtube.com/watch?v=mScpHTIi-kM)
• [Game Theory 101](https://www.gametheory101.com/)
• [Behavioral Game Theory - Colin Camerer](https://www.goodreads.com/book/show/469689.Behavioral_Game_Theory)