The Blackmailer's Paradox Analysis

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The Blackmailer's Paradox To explain what the paradox is, let us assume that there are two individuals X and Y. Z offers X and Y $10,000, but his condition is valid only if they divide the money amongst themselves. X is elated and suggests Y that they must split the money into half so that each of them takes $5000. However, Y rejects the offer and proposes a 90-10 ratio such that Y takes $9000 and X has $1000. X refuses to take the offer and suggests Y that if they split the money into half, both will be better off rather than taking no money at all. Y insists on the 90-10 offer or chooses to leave the money, which X, accepts since he is left with no choice in the end and he would rather take $1000 than no money at all. Thus this is the Blackmailer's paradox. X who is a rational thinker, is forced to behave irrationally to…show more content…
If both the players no that there might be a repetition of event, there is cooperation among the two sides. If X had been adamant on the amount he deserved even if he obtains a total loss out of the situation, the game results could have changed for the situation. There could be a possibility that both X and Y would have left without any money, but had the event repeated in future, Y would remember X's initial move in the past and could be willing to compromise. That is how Israel must act. In order to improve its position it must look at the long term consequences and act accordingly even if it takes them to forego an agreement and continue with the state of war. 3) Another crucial factor would be to have faith in your own opinion. In the example explained above, X has an unwavering opinion due to which it gives the contender a good start and confidence and eventually convinces the rival about the agreement. In such a case the rival is forced to behave irrationally due to the conditions of the

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