In his book Games Indians Play: Why We Are the Way We Are, V. Raghunathan writes about a farmer whose corn won top awards year after year. When a reporter asked about the secret of his success, the farmer attributed it to the fact that he shared his corn with his neighbors. Why, the reporter wondered, would the farmer want to share his seed when those neighbors also competed with him for the prize? The farmer’s reply was, “The wind picks up pollen from the ripening corn and swirls it from field to field. If my neighbors grew inferior corn, cross-pollination would steadily degrade the quality of my corn. If I am to grow good corn, I must help my neighbors do the same.”
That Indians often fail to act like this farmer is the principal theme of Raghunathan’s book. Using examples as varied as their tendency to drive through red lights to their failure to protect the environment, Raghunathan argues that Indians often act in ways that focus on winning immediate gains at the expense of long-term benefits. What makes Raghunathan’s approach unusual is that his argument isn’t a moral diatribe: He employs game theory — a branch of mathematics — and related concepts, such as the prisoner’s dilemma, to present his case.
India Knowledge@Wharton: Your book is titled, Games Indians Play: Why We Are the Way We Are. What are Indians like?
Raghunathan: In the first chapter of my book, I describe what I believe Indians are like by offering 12 canons of “Indian-ness.” For example, one of our traits is “low trustworthiness.” By that I mean we are most likely not to cooperate in a prisoner’s dilemma kind of situation. Privately, Indians are reasonably smart — in fact, we are as smart as anybody else — but publicly we are dumb. Our ability to understand the need for cooperation is very low. We believe that cooperation and selfishness cannot go together — which is not true. We also tend to be very fatalistic in our outlook. We give excuses such as, “What can I do alone? Everybody else is looking out for himself, so why shouldn’t I?”
India Knowledge@Wharton: What exactly is the prisoner’s dilemma, which you just mentioned? How do you use it to explain the behavior of Indian business people?
Raghunathan: The prisoner’s dilemma, which was first developed by researchers at the Rand Corporation during the 1950s, is a concept that has come to occupy a prominent place in game theory. The problem statement goes like this: Assume that you and I are co-conspirators in a crime. Each of us is selfish and coldly rational. We are being interrogated in two separate cells, and we are unable to communicate with each other. The interrogator tells you that he has enough evidence to put each of us away in the slammer for two years each. However, if you squeal on me and help him prosecute me, he will set you free immediately and imprison me for five years. He also tells you that he will make an identical offer to me (though you and I cannot communicate). If each of us betrays the other, he will put us both away for four years. Being selfish and rational, we have to respond to the offer in terms of what is in our best self-interest.
Now, here is our dilemma: Should we defect and squeal against each other, or should we cooperate and hold out against the interrogator? You may reason that if I defect, it would be in your interest to defect as well — otherwise you will be stuck in prison for five years while I go free. And if I do not defect, it is still in your interest to defect, since you will walk free immediately. So you decide to defect. I follow the same reasoning, and I defect as well. As a result, each of us ends up with four years in prison. If we were to cooperate, though, each of us would be better off because the interrogator has evidence to put each of us away for just two years. But for us to end up with that outcome, we need to recognize that the two-year punishment we will have to accept for cooperating is better for each of us than the four-year punishment we would get for defecting and ratting out each other.
Our situation is such that we believe that if we do not cooperate, we benefit more. We put ourselves in the other person’s situation: We ask, if he does not cooperate, why should I? If he cooperates, it may still be in my interest not to cooperate, because I benefit by not cooperating.
Although this may sound abstract and theoretical, this is often how Indian business people tend to think. Very often our exporters show samples that are of a high quality, but when the time comes to ship the goods, they send something inferior. This is very much like a prisoner’s dilemma situation. You may initially make money because you have gotten something for nothing, but going forward — in an iterative kind of a context — you will most probably fail. You will stop getting export orders when your customers figure out that they cannot depend on your quality. They will stop trusting you and start suspecting you. In my book, I cite the example of some Indian companies that had won orders to export powdered red peppers (or chillies) to Korea. Apparently, when the goods arrived, the Koreans discovered that the very first consignment was adulterated with red brick powder. The Koreans emptied the whole consignment in the high seas, vowing never to import this product from India. I read a similar report as recently as last year.
The prisoner’s dilemma also explains why Indian companies often fail in joint ventures. We tend to be over-argumentative and often look out for our own narrow advantage rather than trying to make the venture succeed. If you look at the way we behave in all kinds of situations — whether it involves jumping a red light or dumping our garbage in the streets — that kind of behavior can be explained by the prisoner’s dilemma. I will keep my own house clean, but the streets are not my business. Since everybody thinks the same way, the public interest suffers.
Please Read the Rest of the Conversation Here. Its Interesting.