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Prisoner’s Dilemma

“If everyone did CSR then everyone would be better off”

I think that this claim is probably true. In any case, today you will hear plenty of good arguments in this favor. The fly in the ointment, so far as trying to persuade business to adopt CSR is concerned, is that so long as it is not the case that everyone does CSR, there is an upfront cost to any business which takes the plunge, with no guarantee that there will be sufficient return on one’s investment.

While you do CSR and your competitor’s doing, they reap the benefits of your socially responsible behavior while you get nothing in return apart from the glow of satisfaction at being able to occupy the moral high ground.

The problem is familiar one from political theory. For example if everyone agrees that we need to do something about climate change. If we all did something about climate change we would all be better off. But everyone also knows that any country which takes the plunge and launches a unilateral carbon emissions initiative will be penalized economically and lose ground against their competitors. That’s why the EU agreement on climate change reached last week is so important.

Students of political theory are told the story of two prisoners who are planning to escape together.Unfortunately for them, the prison authorities have hit on the perfect plan to prevent any escape. If either provides evidence that the other prisoner is attempting to escape, the informer will be granted his freedom and given a million dollars. The prisoner’s would be happy neither to settle for escape without the money, but neither can trust the other nor to go for the extra million.
What would you do?

There is no technical solution to this problem in the form of a game plan which is guaranteed success. If our two prisoners find a way to trust each other, then they will make good their escape. But how are they to do this?

Trust can be won, but not compelled. And when you have someone’s trust, you can never be 100% sure that you have it. Along with trust you need faith.

"I hope one can see some relevance of this to the case of CSR"

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