I’m a bit uncomfortable with the “extreme adversarial threats aren’t credible; players are only considering them because they know you’ll capitulate” line of reasoning because it is a very updateful line of reasoning. It makes perfect sense for UDT and functional decision theory to reason in this way.
I find the chicken example somewhat compelling, but I can also easily give the “UDT / FDT retort”: since agents are free to choose their policy however they like, one of their options should absolutely be to just go straight. And arguably, the agent should choose that, conditional on bargaining breaking down (precisely because this choice maximizes the utility obtained in fact—ie, the only sort of reasoning which moves UDT/FDT). Therefore, the coco line of reasoning isn’t relying on an absurd hypothetical.
Another argument for this perspective: if we set the disagreement point via Nash equilibrium, then the agents have an extra incentive to change their preferences before bargaining, so that the Nash equilibrium is closer to the optimal disagreement point (IE the competition point from coco). This isn’t a very strong argument, however, because (as far as I know) the whole scheme doesn’t incentivize honest reporting in any case. So agents may be incentivised to modify their preferences one way or another.
Reflect Reality?
One simple idea: the disagreement point should reflect whatever really happens when bargaining breaks down. This helps ensure that players are happy to use the coco equilibrium instead of something else, in cases where “something else” implies the breakdown of negotiations. (Because the coco point is always a pareto-improvement over the disagreement point, if possible—so choosing a realistic disagreement point helps ensure that the coco point is realistically an improvement over alternatives.)
However, in reality, the outcome of conflicts we avoid remain unknown. The realist disagreement point is difficult to define or measure if in reality agreement is achieved.
So perhaps we should suppose that agreement cannot always be reached, and base our disagreement point on the observed consequences of bargaining failure.
I’m a bit uncomfortable with the “extreme adversarial threats aren’t credible; players are only considering them because they know you’ll capitulate” line of reasoning because it is a very updateful line of reasoning. It makes perfect sense for UDT and functional decision theory to reason in this way.
I find the chicken example somewhat compelling, but I can also easily give the “UDT / FDT retort”: since agents are free to choose their policy however they like, one of their options should absolutely be to just go straight. And arguably, the agent should choose that, conditional on bargaining breaking down (precisely because this choice maximizes the utility obtained in fact—ie, the only sort of reasoning which moves UDT/FDT). Therefore, the coco line of reasoning isn’t relying on an absurd hypothetical.
Another argument for this perspective: if we set the disagreement point via Nash equilibrium, then the agents have an extra incentive to change their preferences before bargaining, so that the Nash equilibrium is closer to the optimal disagreement point (IE the competition point from coco). This isn’t a very strong argument, however, because (as far as I know) the whole scheme doesn’t incentivize honest reporting in any case. So agents may be incentivised to modify their preferences one way or another.
Reflect Reality?
One simple idea: the disagreement point should reflect whatever really happens when bargaining breaks down. This helps ensure that players are happy to use the coco equilibrium instead of something else, in cases where “something else” implies the breakdown of negotiations. (Because the coco point is always a pareto-improvement over the disagreement point, if possible—so choosing a realistic disagreement point helps ensure that the coco point is realistically an improvement over alternatives.)
However, in reality, the outcome of conflicts we avoid remain unknown. The realist disagreement point is difficult to define or measure if in reality agreement is achieved.
So perhaps we should suppose that agreement cannot always be reached, and base our disagreement point on the observed consequences of bargaining failure.