Pemberton

In Tuesday's class we did an activity involving a town called Pemberton. We were told that there was 2 general stored located in Pemberton and that we owned one of them. There was a law that stated that we couldn't be open on Sundays. We still could, choose to stay open on Sundays and choose to bear to consequences.

The activity involved us holding up a sign that stated either, "Open" or "Closed" to show our competitor whether we were going to stay open on Sundays. My partner and I didn't have much of a strategy for the first round. We sort of just held up a different sign each time for the first 4 rounds. 

After the fourth round, we had a negotiation period. We negotiated to both of us stay closed on Sunday for the next 4 rounds. This would assure us both to receive a profit only. 

After those 4 rounds we had another negotiation period. We once again decided to both stay closed for the final 4 rounds. However, on the fourth and final round, which was a 4x multiplier round, we switched our sign and held up the "Open" one. This meant that our final profit was $260,000. This also meant that our competitor lost a lot of money and their final profit, well loss, was 40,000.

After we finished the game we were informed that it was actually modeled after the Prisoner's Dilemma game. We then went on to discuss that the trick was to decide what a "fully rational" person would do. This brings the human element into the game and makes it extremely hard to try guess the outcome of the person you are "playing" against.