Strategic Management - Solution to the Pirate puzzle.

In mathematics, game theory models strategic situations, or games, in which an individual's success in making choices depends on the choices of others. The pirate puzzle is an application of the game theory. I have mentioned a simplified version of the pirate puzzle. This logic can be extended to 5 pirates or more. This puzzle has implications in the real world as well.

The game

Three pirates (A, B, and C) arrive from a lucrative voyage with 100 pieces of gold. They will split up the money according to an ancient code dependent on their leadership rules. The pirates are organized with a strict leadership structure: pirate A is stronger than pirate B who is stronger than pirate C. The voting process is a series of proposals with a lethal twist.

Here are the rules:

1.The strongest pirate offers a split of the gold. An example would be: 0 to himself, 10 to B, and 90 to C.

2.All of the pirates, including the proposer, vote on whether to accept the split. The proposer holds the casting vote in the case of a tie.

3.If the pirates agree to the split, it happens.

4.Otherwise, the pirate who proposed the plan gets thrown overboard from the ship and perishes.

5.The next strongest pirate takes over and then offers a split of the money. The process is repeated until a proposal is accepted.

Pirates care first and foremost about living, then about getting gold. How does the game play out?

Solution :

As per the first rule, Strongest pirate offers split of the Gold. If every one agrees then they will split, other wise they will go for VOTING on accept the split or not. So Let us assume different Possibilities of best Outcome of the Solution.

Spliting of GOLD, YES (Pirate A)- NO (Pirate B & C)  then the Proposer i.e Pirate 'A' Get thrown overboard from the ship and Perishes. Here, we need to realize that the person having highest power has to act first in strategic way to get maximum share by applying best possible strategy. 

If Pirate 'A' ever get thrown overboard then the best possible way of getting maximum share is to buy off the weakest member i.e 'C' , because if Pirate A perishes then 'c' could not end up with nothing. How ? If pirate A get thrown over board then Pirate 'B' will turn in to dictator and takes full advantage of taking 100 Gold coins to himself and nothing to Pirate 'C' , So Pirate 'C' has to shown keen interest in keeping Priate 'A' alive. If Pirate 'A' gives any reasonable offer then 'C' should accept, Even if it is one Piece of gold coin. 

That is what the Strategy implemented by Pirate 'A' , where he buys the Pirate 'C' by offering one piece of gold coin to gain in Voting process. Pirate B ends up with nothing and Pirate 'A' Ends up with tremendous power by taking 99 Pieces of GOLD. Luckily, the opponents dislike each other and one can be bought off.

Don't caught up with assumptions we made here, just try to stick with the basic lesson we learned. some times in the real world, it might necessary to buy a VOTE with 20 Gold coins inorder to get maximum sharing. 

 Lessons: 

 
• Players should think ahead and reason backwards
• A leader can win by exploiting conflict among weaker members
• Players derive worth from voting power, and some players can be bought off.

Solution sloved by one of the Person who is in to practices of Management, It is not by me.

-LaLi-