Game Theory in the Computer Industry
A commonly debated puzzle from game theory is the prisoners dilemma. Two crooks are caught. If one crook squeals on the other, but the other remains silent, the informant gets away free. The other has to spend 20 years in jail. If both crooks squeal on each other, the result is 15 years for each of the crooks. However, if both crooks remain quiet, they both can get out of jail in a few months.
Under this scenario, self-interest is not the best option. If both crooks act in their own self-interest, they both will spend a long time in jail. However, if they have enough faith to cooperate, the result is good for both of them.
An analysis of the data storage industry recently took this circumstance into account. At the moment, the demands for massive amounts of storage are not being met. The reason lies in the fact that competing vendors are slow to share their protocols for communication with each other.
In the computing industry, the winning strategy is standardization. When competing vendors can cooperate together by opening their protocols, they can create stronger solutions. While a company may initially help it's competitor as well, they have created a larger marketplace for their products. Additionally, the value of the products acting in concert creates more value for the buyers. This in turn should put the buyer in a stronger position to reinvest it's earnings in the future.
