Here in this exercise, we need to either nominate a person from the division to
progress higher up in the corporation or with-hold the nomination. If our division
nominates the person, then we risk of losing the person. However, other divisions
are also in a similar dilemma. They can also nominate or withhold people from their
own team. If all four divisions nominate, every division gains 1m$ each. If all 4
divisions withhold, all four divisions loose 1m$each. If two divisions nominate and
the other two divisions with hold, the nominators lose 2m$each and the with-
holders gain 2 m$ each. If our division nominates and the other 3 with draw, we
loose 3m$ and the other 3 divisions gain 1m$ each. On the contrary, if we with hold
and the other 3 nominate, we gain 3m$ each and they each loose 1m$ each. In the
initial few rounds we are not allowed to talk and we have to make our decision at the
same time-whether to withhold or to withdraw and announce publicly.
My divisional colleague and I spoke about our strategy. Since we did not know what
was at the back of the minds of the other individuals, we decided to withhold as we
thought perhaps we would be the only one to nominate and the others would with-
hold-this would lead to a big negative pay-off for our division. I bet all the divisions
though the same and when we got our results, we found out that everyone had with-
held. We all were worse off by 1m$ and the corporation was overall worse off by
4m$.
We continued to play this game during the next several rounds. However, in the
