We’ve spoken with many friends and acquaintances who, at one time or another, have complained about the trustworthiness of their colleagues or co-workers or bosses.  When we’ve heard these complaints, we’ve consistently replied: “Yes, but thank goodness that they′re predictable.”  When we make this comment, we almost always get a stare in return—until we explain.

Let′s face it.  Given the fallen nature of man, there are at least a few people who are unworthy of trust.  Included among their traits, the untrustworthy tend to be both short-sighted and selfish or greedy.  We usually think of the dull ones as being impulsive, and the clever ones as being devious.*  Regardless, their personal goals are usually selfish and often immediate.

When we lecture on incentives, one of the first slides we show contains the following:

Our approach to information and incentive issues:

“Little is gained from becoming indignant about self-seeking behavior by managers.  It is only human for managers to have their own goals and ambitions…. A more productive response is to take as given the manager’s aims, and ask how to design institutions that work as well as possible.”

John McMillan
Games, Strategies & Managers

Like Mr. McMillan, we view this self-seeking behavior as natural and as an implication of our God-given free will.

So, what’s our point?  In economics and game theory, agents—more precisely, their preferences—are modeled as mathematical functions.  Under the right conditions—when the models are solvable—their behaviors or actions are predictable.  (We’re ignoring mixed strategies, here.)

It is our view that the consistently untrustworthy are the closest real-world analogs that we have to mathematical functions.  So we ask: do you prefer the untrustworthy to be predictable or not? (The impulsive are usually not clever enough to use unpredictability as a tactic.)

Here’s an brief example.  We′ve known any number of folks who love to gossip and who are extremely poor at keeping secrets.  How did we know?  We heard everyone else′s, of course.  Anyway, for any number of reasons, there are times when one may want a third party to know something but one does not want to be the (direct) bearer of the news.  What to do? Tell it to the gossip in confidence.  The third party will know it before the day is over.

So, don’t lament humanity, embrace it, but on your terms.

*We also remark, the more confident the dullard of his or her own assessment (and of his or her own ability), the easier it is to get one′s way when playing against them.  We’ve been blessed to play games against a few of those folks in our short, young life.