Hello. I’m Ed Latimore, and this is the Stoic Street Smarts newsletter. Keep reading to learn how to manage risk, develop relationships, and face reality.

Quick summary of today's newsletter:

• The "Big Stick Policy" and game theory's "Prisoner's Dilemma" offer valuable insights into strategic decision-making and cooperation in interpersonal relationships.
• The best defense is a willingness to be offensive
• Snitches get the worst of both worlds
• Cooperation beats competition in almost every domain
• Too much self-interest causes too little self-improvement

Before diving into today's newsletter, I want to thank everyone who took the time to give me feedback about what you enjoy about my newsletters. Specifically, your feedback helped me see what people find valuable about my content and offering.

Perhaps the biggest surprise was what people *didn't* say. Only one person mentioned any of my content on writing and social media, and the one person who did said, "I skip the emails about that stuff."

That information might seem trivial, but it helped me make a few business decisions. You guys saved me tons of hours, a bit of money, and my reputation. So, thanks again.

And I definitely responded to everyone. If I didn't, yell at me.

The waitlist for The Weapons of Forgiveness cohort is now open. I'll be hosting a two-week event that teaches you how to heal yourself, vanquish your foes, and change the world with the power of forgiveness.

I teach forgiveness using a non-religious framework, as I think it's a tool available for everyone, regardless of their faith or denomination. It's the same method I've been using to help people in recovery for years.

​Sign up for the waitlist here.​

How to use Big Stick Energy to survive the Prisoner's Dilemma

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"Big Stick Policy"—not to be confused with "Big d*ck energy" was Theodore Roosevelt's foreign policy. He described it as "the exercise of intelligent forethought and decisive action sufficiently far in advance of any likely crisis."

Big Stick Policy consisted of five parts:

1. Serious military capability that would force the adversary to pay close attention
2. Act justly toward other nations. "Don't start no shit, won't be no shit."
3. Never to bluff. You must follow through with your threats to ensure people take them seriously.
4. "Strike only when prepared to strike hard." Don't start a fight, but if you find yourself in one, be the one to end it.
5. "Be willing to allow the adversary the ability to save face." There's no need to beat an opponent mercilessly. Always give them a way out.

Life is a game. Even when it's serious, you're still just playing a game. The cruelest part of this game, aside from it not seeming like a game, is that no matter how well you play, you can never beat it.

Or, to put it more grimly, no one makes it out of this thing alive. Like a bad horror movie, we all die in the end.

Still, just because you can't beat this game doesn't mean you don't need a strategy to play it well. As sports coaches teach, it's not whether you win or lose; how you play makes all the difference. Enter "Game Theory."

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"Game theory is a branch of mathematics that studies strategic decision-making in situations where multiple players interact, and the outcome for each player depends on the actions of all participants."

That's the official definition, but if you strip away the technical precision, you're left with a straightforward idea: Game theory studies how the decisions and motivations of one person affect everyone else.

That's the perfect definition of the game of living, so it's fitting that it's also the definition of game theory.

The most famous problem from game theory is known as "The Prisoner's Dilemma." The problem is usually presented as follows:

Two suspects, A and B, are arrested for a crime. The police lack sufficient evidence to convict them, so they separate the suspects and offer each the same deal:

1. If one suspect confesses (defects) and the other remains silent (cooperates), the defector will be released, and the cooperator will serve a 10-year sentence.
2. If both suspects confess (defect), each will serve five years in prison. 3. If both suspects remain silent (cooperate), each will only serve one year on a lesser charge.

Each suspect must choose to either confess or remain silent without knowing the other's decision. What's the best way to play this game?

Even if you know the answer, you'll want to read the next part to understand how researchers arrived at the best strategy and what it has to do with walking softly and carrying a big stick.

Robert Axelrod, a political scientist at the University of Michigan, conducted a series of computer tournaments in the late 1970s and early 1980s to study the Prisoner's Dilemma and identify successful strategies for the game. His work enhanced our understanding of cooperation, reciprocity, and the evolution of strategies in repeated interactions.

In his first tournament, Axelrod invited experts in game theory to submit computer programs that would repeatedly play the Prisoner's Dilemma against each other.

The submitted strategies included various algorithms designed to maximize each program's payoff. The most successful strategy, named "Tit for Tat," was submitted by Anatol Rapoport, a mathematical psychologist.

The Tit for Tat strategy follows these simple rules:

1. Cooperate on the first move.
2. For subsequent moves, do whatever the opponent did in the previous move (i.e., cooperate if they cooperated, defect if they defected).

Axelrod ran a second tournament with more participants and a slightly modified setup. Tit for Tat emerged as the winner again, reinforcing its robustness as a strategy. Tit for Tat's success was attributed to its combination of being

1. Nice (starting with cooperation)
2. Retaliatory (punishing defection)
3. Forgiving (returning to cooperation after punishment)
4. Clear (easy for other players to understand).

The best way to play the Prisoner's Dilemma game is identical to Big Stick Policy. The similarities are easy to see if we replace some military terminology with the equivalent ideas for interpersonal connection. Here is the Big Stick Ideology with the appropriate substitutions.

1. Serious ability to stand your ground that would force the adversary to pay close attention. The easiest way to get attacked by a predator is to behave like prey. If people think you'll be an easy target, they'll treat you like you one. The best defense is being willing to go on the offensive.
2. Act kindly toward other people. I always say you want to be a nice guy who isn't afraid to check people if they start acting "outta pocket." "Don't start no shit, won't be no shit."
3. Never bluff. If you never follow through with your threats, they will never be taken seriously. But, taking this a step further, I say never issue threats. Let your actions do the talking. You'll need to talk less and take fewer actions.
4. Strike only when prepared to strike hard. If you have to act, commit to the complete destruction of your enemy. There are limitations to this, depending on the context of potential conflicts. However, the main point is that you can't half-step or tip-toe into a confrontation. Don't start the fight, but make sure you end it in such a way that the perceived value of future aggression towards you exceeds the cost. Even if you lose, make sure it's a pyrrhic victory for your opponent.
5. Be willing to allow the adversary the ability to save face. When you beat someone or prove them wrong, leave them an out to save face. They might be too stupid or ego-invested to take it, but the ones who do will appreciate you. You'll gain a new ally and supporter, and you *never* know when that will come in handy.

Now, at first glance, these sound more like rules of engagement than for interpersonal relationships. That's the point, and it requires revisiting a simple truth about human nature that explains every behavior.

People are self-interested. They do what is in their best interest. If appropriate checks and balances on self-interest disappeared, people would do and take whatever they wanted. And it wouldn't be personal, in the sense that you did something to offend, so now they're retaliating specifically.

Big Stick Ideology and The Prisoner's Dilemma teach us that the best way to deal with people is with respect and kindness and, if that is not returned in kind, to extend a small degree of patience. If that is ineffective, you must decisively stamp out the offending party.

To achieve the best collective outcome in The Prisoner's Dilemma, both suspects should remain silent (cooperate), which would result in a total of two years of prison time.

However, from an individual perspective, each suspect is better off confessing (defecting) regardless of what the other suspect does. If the other suspect confesses, confessing results in 5 years instead of 10. If the other suspect remains silent, confessing results in 0 years instead of 1.

If you're ever in a position where you're pressured to "snitch" (rat on your colleagues in crime), the better outcome is ALWAYS to shut up. The Prisoner's Dilemma captures the power of trust and cooperation when facing a penalty, but it doesn't tackle the problem of post-event trust.

When you're a criminal and you "turn states" (start working with law enforcement), you end up as a man with no country. You're no longer someone other criminals will work with, but civilians will still look at you as a criminal. The nature of this problem also exhibits another reason why it's crucial to cooperate with people who are in your tribe.

Big Stick Policy makes it expensive to be your enemy. The willingness and ability to react violently deter unprovoked aggression. At the very least, to quote Junior Soprano in The Sopranos, you'll "Come in heavy or not at all." Imagine how this might play out in a social setting where someone tries to divide friends by spreading rumors.

They should fail because friends in the same tribe should cooperate, i.e., not believe rumors or speak ill of one another. That much is obvious to most people, but what often goes without proper consideration is that the person shouldn't feel comfortable speaking poorly about your friends to you in the first place. If that happens, it's because you didn't sufficiently dissuade them with your show of loyalty.

Yes, people will try because they're bitter. However, the strength of a relationship should deter this behavior, and if it doesn't, the proper response should ensure it doesn't happen again.

I remember the first time I played a version of this game for a group training exercise at a seminar in Los Angeles. In that format, we partnered with someone, and in each round, we had the option to take five dollars or give it to our partner. Our choices were revealed after each person submitted them.

If we both chose to take, we got nothing. If person A took $5 and person B gave $5, then A got $5, and B got none. If both people chose to give, we each got $3. The individual with the highest total after 20 rounds could keep the money.

Given the payoff structure, the way to play this game is for both people to give selflessly. This strategy maximizes our total score and increases our chances of winning. When you stop being self-interested, the math on this is pretty straightforward. But we all failed miserably. Why?

The temptation to beat your partner is so strong that it overshadows your thinking. The best strategy is easy to figure out, but emotions and self-interest can be destructive.

Sometimes, this destruction is incidental, but many times, it's on purpose. Never forget that some people would rather be a solo loser than a team winner.

These people also believe that blowing out your candles makes theirs brighter. To highlight this destructive quality of human nature, I'll leave you with a line from the results of a study I read a while back titled "Cooperating With the Future."

"Here we show that the resource is almost always destroyed if extraction decisions are made individually. This failure to cooperate with the future is driven primarily by a minority of individuals who extract far more than what is sustainable. In contrast, the resource is consistently sustained when extractions are democratically decided by vote."

This lesson is different from the comparison to Big Stick Policy, but it gives another insight that I wanted to highlight. Because we share one planet, the outcome of our choices is a zero-sum game.

If people can't cooperate, they are competing. Pursuing self-interest above collective concern doesn't always feel like competition, but it creates a de facto competitive environment.
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Competition is good, but not for everything and not all the time. If you can't control the part of you that needs to beat everyone, eventually, you'll lose to people who have figured out that cooperation is the way forward.