MAGDA WIERZYCKA: When self-interest is the only way out

I am loath to contribute to the noise around the elections at this time as enough has been said on the topic. On the other hand, the goings-on at the Public Investment Corporation (PIC) and Zondo commissions of inquiry continue to fascinate me.

One of my favourite theories when studying economics at university was called the prisoner’s dilemma. Although taught as part of behavioural economics it is actually premised on game theory and is a paradox in decision-making whereby two individuals acting in their own self-interests do not achieve the optimal outcome for the pair.

A typical prisoner’s dilemma is set up in such a way that both parties choose to protect themselves at the expense of the other participant, and shows that two completely rational people are unlikely to co-operate with each other even if it appears that it would be in their combined best interests to do so.

There are many variations on the theme, but a simple example is one where two people are arrested and kept in solitary confinement with no way of communicating with each other. The police don’t have enough proof to convict either for a major crime, but they have enough to arrest them for a minor offence carrying, say, a one-year prison sentence. They simultaneously offer each prisoner a deal.

Each is offered the opportunity to testify to the crime, betraying the other, and be set free. The offer is typically framed as: if both A and B confess to the major crime, each gets three years in prison. If A betrays B, who remains silent, A will be set free and B gets five years, and vice versa. If both A and B remain silent, the only thing that they can be convicted of is the minor crime with a one-year prison sentence attached.

Although collectively the rational choice would be for both to remain silent, because betraying a partner offers a greater individual reward one individual will almost certainly betray the other. One can skew the incentives in a variety of ways, but because betrayal always results in a better individual payoff than co-operation, it is the dominant strategy.

The prisoner’s dilemma has numerous applications across many fields such as economics, politics, sociology and evolutionary biology. One of the best recent examples has been Brexit and EU negotiations.

Britain’s 2016 decision to leave the EU gave it two years to negotiate a political and economic post-exit deal. If both parties decided to work together to their mutual benefit and compromise, a deal might have been struck. However, as each party approached the negotiations with self-interest in mind, with Britain seeking all the advantages of the EU’s single market with none of the associated costs, and the EU wanting to see visible consequences for a country opting out, the result has been a loss for both.

The prisoner’s dilemma is also on display at the PIC and Zondo commissions. People will always act in their own self-interest rather than co-operate and stay silent.

The fact that this is happening is, of course, hugely positive for society and for SA. It is key that people who were complicit in a crime, either by omission or commission, come forward and tell the truth; the sooner the better. They are likely to be the beneficiaries of confessing first. If they wait too long, others will confess and any leniency or redemption the guilty may hope for would have been granted to someone else.

So, if you are the mastermind behind some of the alleged misdeeds, be you Iqbal Surve or Khalid Abdulla in the case of Ayo Technology, or Gavin Watson of Bosasa notoriety, you must be cringing.

Your options are not those of the classic prisoner’s dilemma. Your choices are limited to watching people who worked for you waking up to the reality of having been manipulated into situations that were not necessarily of their own invention, now deciding to act in their own best interests. And act they should. The Omerta code of silence has been broken.

• Wierzycka (@Magda_Wierzycka) is Sygnia Group CEO.