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Sunday, March 14, 2010

Reminder: Cooperation is an Illusion

Before I get to my series on 2009 (Year in Review), I feel compelled to repost an article I published in May 2007 titled, The Photographer's Dilemma: To Cooperate or Not?

I feel compelled to post this now because of a new swell of populist rhetoric in some blogs and discussion forums that preaches that photographers should stick together, and not take low-fee jobs (or work for free), because such actions bring down the collective value of the photo industry and encourage clients to expect more for less.

This very idea is pleasing to believe, and always goes over well with pro photographers, but it runs counter to many proven economic principles. One of the pinnacle truisms of economics is called The Prisoner's Dilemma, which not only shows that such cooperation never helps, but it actually harms those who cooperate more than those who don't. This famous experiment demonstrates the basic principle:

You and a friend have robbed a bank. You almost get off scott-free, except for an old lady who "thinks" she saw you, but isn't quite sure. The police round you two up, but because the witness is uncertain, you and your friend agree that the best thing to do is not confess anything. That is, by cooperating, you can each assure that you will both be protected. But, the twist is that the police place you into separate cells, and interview you separately:

"If one of you testifies against the other, and the other remains silent, the betrayer goes free, and the other gets 10 years in prison. If you both stay silent, we can't convict you on the bigger sentence, but we can get you on lesser charges, giving you six months in jail. If you both betray each other, then you both serve two years."

Each of you has two options: stay quiet, resulting in a lighter sentence for each of you. Or, defect from the pact. The table below illustrates your options:

Prisoner B Stays Silent Prisoner B Betrays
Prisoner A Stays Silent Each serves six months Prisoner A serves ten years
Prisoner B goes free
Prisoner A Betrays Prisoner A goes free
Prisoner B serves ten years
Each serves two years

Because you're in separate cells, you have no idea what your friend is going to do. But here's where your mind plays logic games. If you knew your friend would stay silent, your best move is to betray, because you then walk free instead of receiving the minor sentence. If you knew your friend would betray you, again your best move is still to betray him, as you receive a lesser sentence than by remaining silent. Of course, your friend will think the same thing and therefore also betray you. Yet by both betraying the other, you both get a worse sentence than if you both stayed silent. So rational, self-interest plays into each of your decisions, making you both worse off than if you'd "cooperated" on the agreement by staying silent.

This experiment illustrates the most fundamental cornerstones of economic theory and has been tested in many different contexts, conditions, and demographics. It was originally conceived in 1950 by Merrill Flood and Melvin Dresher working at the RAND corporation, and became the basis from which John Forbes Nash derived his famed "Nash Equilibrium", which earned him a Nobel Prize for Economics. It has since served as the foundation for most businesses, governments, social policies, and many other aspects of everyday life because it reflects innate human decision-making. So long as there is no interfering body, policing of behaviors, enforcement of compliance, or any other factor to deter this natural human instinct, it is "natural" to serve one's own interests, and also to protect against harm from others by "betraying" them first.

If this is the case, why doesn't society collapse? Because we have an intricate and complex system of checks and balances. We have laws that keep people from stealing or harming each other, police to enforce them, social stigmas, and religious dogma, just to name a few. There's also the fact that society isn't necessarily a zero-sum game: people don't kill each other unless there's some gain in it. In fact, there's a great deal of self-protection in maintaining order and keeping peace.

What does this have to do with the photography business? Because there are more photographers than there is a demand for them. Therefore, it's a buyer's market: people will offer less and less, and there will always be photographers that will take it. Attempting to get photographers to "cooperate" is literally impossible. In fact, those who do cooperate will find themselves harmed worse, leaving an even greater proportion of those remaining unwilling to cooperate.

Unless there is a plausible, accepted, and recognized enforcement of compliance -- such as how laws protect worker's unions from both defectors within the union, and from companies to hire people outside ethe union -- it is literally impossible to effect change through mass cooperation. In fact, this is why union laws were created.

So why don't photographers form a union, or why doesn't the government set up some sort of pricing protection policy? The first answer is that photographers did have a union, but it was broken up in the 1970s for restraint of trade, which was triggered by two events: buyers were harmed because there was no competition in pricing. They had to buy photos only from union members, who, by law, were required to sell their photos at a set price. Secondly, photographers complained that they couldn't work because the union wouldn't let them in. So, too many people weren't working. A photographer's union caused far more harm than good.

As for the government setting up pricing protection, that's not its role or responsibility in society. It has never done such a thing, nor would anyone ever accept it.

Then there are those who feel that you just need most photographers to cooperate. But the Prison's Dilemma game has proven that the core, self-interest behavior has not only been established in small groups of people, but it has been shown that the greater the number of players, a smaller and smaller ratio of defectors is necessary to dilute the effects of the group. In any business model, whether it's a sole photographer, or a larger agency selling the work of thousands, this is this fundamental principle that instantly discounts all arguments made by photography interest groups that "sticking together" works. (That photo interest groups and educational systems continue to advocate this approach does more harm to those in the photo industry than anything else.)

In summary, photographers of today cannot possibly expect to achieve anything by attempting to cooperate with one another. Doing so will only cause more harm to those who try. Making money in photography is about developing a career, not by stringing together one paid gig after another. If you develop yourself as a professional, money comes, and you're paid on many qualities and skills well beyond "photography." If someone isn't willing to pay you more than the competition, you're either not worth it, or the gig is too simplistic to expect it. Real success is having a skill or quality that cannot be provided by the lowest bidder.

For a discussion on that, see Photography and Business Sense.

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