Front Page Titles (by Subject) Self-Interest and Social Good - Literature of Liberty, January/March 1978, vol. 1, No. 1
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Self-Interest and Social Good - Leonard P. Liggio, Literature of Liberty, January/March 1978, vol. 1, No. 1 
Literature of Liberty: A Review of Contemporary Liberal Thought was published first by the Cato Institute (1978-1979) and later by the Institute for Humane Studies (1980-1982) under the editorial direction of Leonard P. Liggio.
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Self-Interest and Social Good
“Information and Strategy in Iterated Prisoner's Dilemma.” Theory and Decision (Holland), 8 (1977): 293–298.
The Prisoner's Dilemma (PD) is a twoperson, non-zero-sum game, where both agents seem to lose by pursuing their isolated self-interest. This dilemma highlights a situation where individual rationality leads to collective disappointment and suboptimal results. Social scientists, philosophers, psychologists, and economists have perceived these disturbing implications. The moral that PD preaches claims that individual or atomistic action may create social ill.
Can one show, to the contrary, that individual rationality and noncoercive social decision processes produce collective goods even without binding “social contracts”?
One escape from the antiindividualist thrust of PD was attempted. It pointed out that realistically the players played this game more than once. The multiple PD games might then result in social optimality. But R. D. Luce and H. Raiffa, in Games and Decisions (New York: Wiley, 1958) supposedly demonstrated that even if the players repeated the game a finite number of times, they would not achieve an optimal social outcome.
But the Luce-Raiffa thesis will not, in general, hold true. One would need to satisfy additional assumptions, which the nonrepeated PD game does not require. These additional assumptions are highly demanding, and rapidly multiply as we increase the game repetitions. This has optimistic implications for individual rationality. In realistic cases where PD game situations are likely to arise more than once (in “iterated” fashion), individual rationality may maximize the “common good” even when individuals have PD preferences. Such optimal results for self-seeking individuals are not quite as unlikely as Luce-Raiffa suggest.