Trust and Prisoners Dilemma in the Workplace- Prof. Rajendra Desai

29 June,2022.

In one of my visits to a tea garden in Assam and its small neighbouring town, I was amazed at the kindness, trust and bonhomie amongst the people in the town. The manager of the tea garden left his car unlocked with the key in the ignition while going into a store to pick up provisions. His explanation was, the town is small and trust is very high amongst the people, so they do not worry about locking doors / cars or anything. I was curious to understand if the bonhomie was because of the high level of trust or the other way around?

In an earlier article, I had mentioned one of the attributes that can help drive ‘love and caring’ in an organisation is ‘trust’. Love and caring were suggested as necessary for firms to retain capable and committed people. This suggests trust should precede everything. In this small town in Assam, there certainly seemed to be ‘love and caring’ amongst the inhabitants possibly a result of the high level of trust amongst its inhabitants.

According to the Cambridge Dictionary, trust is ‘to believe that someone is good and honest and will not harm you, or that something is safe and reliable.’ Let us look at trust in an organizational context.

After over 2 years of working from home, firms are reverting to a few days of ‘work from office’. While work from home was appreciated by firms for the cost and working efficiencies with a realisation that some functions and roles were handled better with a physical presence. Some CEOs like Elon Musk have taken this ‘back to office’ to an extreme – he messaged to the employees of Tesla “Everyone at Tesla is required to spend a minimum of 40 hours in the office per week, if you don’t show up, we will assume you have resigned.”

Such a message appears to be a complete erosion of trust – erosion of the belief that ‘employees are good and honest and will deliver while not harming the organisation if they are working from home. It seems Tesla is no longer interested in driving ‘love and caring’ in the firm and by corollary, retaining capable and committed employees.

Trust appears to be eroded by monitoring. Baier (1986) says “Trust is a fragile plant which may not endure inspection of its roots, even when they were, before inspection, quite healthy”. If a parent hires a babysitter and then keeps a watch remotely on the baby sitter using a camera – she is no longer trusting the baby sitter. Trust comes with an exposure to risk and since all of us are prone to minimize this risk, negligible monitoring may not erode trust in an organisation.

Organisations find it necessary to monitor attendance, leave, time spent at work (some IT firms actually have software to monitor login times, keystrokes, time away from computer…), work output during work from home period. A daily, weekly or monthly monitoring system replaced with a self-recording-assessment / outcome-based system maybe more useful to drive mutual trust.

Of concern to a firm is the issue of violation of the trust. For a perspective on this, the game theory framework of the prisoner’s dilemma is interesting to explore.

In the classical version of prisoner’s dilemma, 2 suspected bank robbers are being interrogated in separate cells. Each is given the option of testifying against the other to get off free of jail time. Each bank robber is faced with the choice to cooperate with his accomplice and remain silent or to defect from the gang and testify for the prosecution.

If they both co-operate and remain silent, then the authorities will only be able to convict them on a lesser charge resulting in one year in jail for each. (= 2 years total jail time). If one testifies and the other does not, then the one who testifies will go free and the other will get five years (0 years for the one who defects + 5 for the one convicted = 5 years total).

However, if both testify against the other, each will get two years in jail for being partly responsible for the robbery (2 years + 2 years = 4 years total jail time).
In a single interaction, the best action for each prisoner is to defect to maximize their own gain. However, in the long run, the optimal strategy for both prisoners is to co-operate (not defect).

In the context of a firm, trust keeps a mutually beneficial relationship between employees, employer and employee going as long as there is certainty of ‘long term’ interaction – that is everyone is clear their engagement is for the long term. It becomes a non-zero-sum game where all gain.

Of course, it can become a zero-sum game (when a person gains, someone has to lose) when the payoffs for defection are substantially higher than those for co-operation. An example of this in a firm could be open access to high value movable assets with no security. In this situation, violating trust is much more rewarding and this deteriorates into a zero-sum game. Occasionally, accidental ‘defections’ can also cause this to become a zero-sum game if there is a high level of miscommunication in the firm. An example could be a bad debt being attributed to collusion by an employee.

To manage mutual trust for co-operative outcomes a firm must be vigilant of signs of erosion of trust. Some of these are – conversations in the firm slowing down, people indifferent to communication, a deteriorating quality of disagreements and the lack of frankness in conversations. Everyone becomes diplomatic and convenience takes priority over the truth. Bosses monopolise thinking and conversations.

Some other indicators are political camps based on tenure, function or hierarchy, a slowdown in genuine support on social media for activities and achievements, blame games by management and of course the end result of all this – exit of capable and talented leaders.

If these signs are visible in the organisation, management will have to take the initiative to drive a culture of trust. Management will have to examine each policy and process with a ‘trust lens’ and modify those which appear to erode trust. As the prisoner’s dilemma analogy brings out, there has to be a commitment and feeling of ‘long term’ in the organisation. The returns of collaboration vs defection have to be substantially higher. Accidental defection must be given an opportunity to clear any misconceptions. This will result in a cultural shift towards trust between all stake holders. The occasional ‘defector’ will be out of place in such an environment and will standout or leave the firm.
Are the conclusions of the prisoner’s dilemma applicable to trust even in underdeveloped and poor countries considering the high value that maybe attached to any defection in these countries?

An experiment of researchers dropping 17,000 wallets with the owner’s card and with/ without money across 40 countries (developed and poor) confirms the basic altruism in human beings. Their conclusion, in 38 out of 40 countries, people were more likely returning wallets with money than those without. The researchers think their findings have to do with altruism and how people see themselves — and most people don’t want to see themselves as a thieves – “the more money wallet contains, the more people say that it would feel like stealing if they do not return the wallet.”

Is there a solution in firms top-down committing to and driving long term relationships while appealing to the basic altruism in employees so they never ‘steal’ from the firm no matter how much ‘money is in the wallet’ – whether in the form of wasted time, movable assets or money?

Baier, A. (1986). Trust and Antitrust. Ethics, 96(2), 231–260. http://www.jstor.org/stable/2381376