Two kingdoms cannot agree on who gets a disputed territory. But the catch is, if they both decide to go to war over it, the cost of the war will exceed the value of the territory.
\ | Cede | Fight |
Cede | 0 \ 0 | -1 \ 10 |
Fight | 10 \ -1 | -90 \ -101 |
Recognizing this situation, the two kings travel to seek judgment by the High Priestess at the Oracle of Delphi. The High Priestess slaughters a sacrificial cow, examines its entrails to divine the will of Apollo, and renders a decision of who shall get the disputed territory.
Both kings accept the Oracle's decision as final, for the myths of old and the Odyssey and the Iliad epics are contemporary reminders of the terrible things that happen to men who defy the will of the gods.
The modern world no longer has such a general mechanism for conflict resolution, though in limited contexts it is binding arbitration.
This is an example of the correlated equilibrium game theory solution concept. Does the high priestess need to know the utilities in order to define the probability distribution? How can we guarantee a Pareto efficient result?
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