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Prisoner Dilemmas
and Social Contract
as a Foundation for
Ethics
Conditions of Prisoner Dilemma
 Consequences for self or organization depends
on behavior, actions, choices of others
 Worse off by all pursuing perceived self-interest
X/Y Game Strategies
 Free Rider (X/ Y)
 Cooperation/ Morality /Social Contract (Y/Y)
 State of Nature (X/X)
 Sucker (Y/X)
Prisoner Dilemma Key Points
 Minimalist assumptions of human (self-
interest and rationality) still lead to
cooperative strategies as better for self
 Paradox -- Worse off pursuing self-
interest; better to do what is not in one’s
self-interest
 Morality -- rules of social cooperation/
social contract
Lessons from Prisoner Dilemma
Exercises (and Leadership Implications)
 Goal clarity/ ambiguity
— Insure that there is clarity on mission and goals
 Strategy (short-term gain/risk vs. long-term cooperation)
— Focus on long-term perspective (as well as short-term)
 Limited communication
— Take responsibility to maximize communication
 Communication  Agreement/ understanding
— Develop Social Contract with input from all
 Necessity of trust
— Build and maintain culture of trust
Hobbes’ Conditions of Nature
 Equality of Needs
 Scarcity
 Equality of Power
 Limited Altruism
Hobbes’ Facts of Nature
1) Equality of Need
2) Scarcity
3) Equality of Power
4) Limited Altruism
Competition
State of Nature
“war of all against all”
“solitary, poor, brutish,
short”
Cooperation
Social Contract
Fundamental Rules
and Basic Elements?
1st Law: “seek peace” but
“defend ourselves”
2nd Law: “lay down right to
all things”
Hobbes:
The Self As Starting Point
Life is Solitary, Poor, Nasty, Brutish and Short
Self-Preservation: A War of All Against All
An Alternative View of Human Nature
(Adam Smith)
 Theory of moral sentiment
— Natural sympathy
— Empathy
— “Fellow feeling”
 “Of this kind is pity or compassion”
 “to feel much for others…constitutes the
perfection of human nature”
Rules and Elements for a Social Contract
 If you were forming and joining a group, what would
your first principles and elements of your social
contract be?
— Such that all would agree to them.
 Morality as Social Contract
— Morality-- set of rules to enhance social living that
rational people would choose for mutual benefit,
on condition that all will follow same rules (James
Rachels)
Social Contract as Basis of Individual and
Corporate / Organizational Ethics
 Social Contract provides basis of individual responsibilities
— Are there personal responsibilities that go beyond the social
contract? Commitment to personal core values and principles.
 Aristotle and virtue ethics
 Social Contract provides basis for corporate/ organizational
responsibilities
— Are there social responsibilities that go beyond industry codes and
other formal responsibilities? Commitment to corporate core values
and principles.
 Corporate values-based leadership.
Basic Rules and Elements
 Do No Harm
 Keep Agreements
 Equality - Reciprocity
 Government/ Organization - Roles
— Processes
 Creation-Modification
 Monitoring-Enforcing
 Dispute Resolution
Organizational Social Contract
 What should be our basic rules of
engagement?
 What are the minimum expectations of one
another?
 What should be our core values guiding our
interactions with one another?
 Fundamental Rules of Behavior
Process for Building Social Contract Across Cultures
and Organizations
 Universal / Maximum participation
 Building from bottom up
 Written or verbal?
 Commitment – signatures?
 Process to deal with violations
 Process to revisit and revise