Has Wal-Mart been studying game theory lately?
"I firmly believe that a company that cheats on overtime and on the age of its labour, that dumps its scraps and chemicals in our rivers, that does not pay its taxes or honour its contracts, will ultimately cheat on the quality of its products," said Lee Scott, the company's chief executive, speaking in Beijing at a specially convened conference for suppliers...
"When we have bought overseas, we have purchased historically in a very transactional manner. We need deeper, longer-term relationships with suppliers so they are not based upon the last penny but provide a quality product at a very good price.
This sounds analogous to a tit-for-tat solution to the Iterated Prisoner's Dilemma. In tit-for-tat strategy, cooperators (safe food suppliers) will be rewarded. Defectors (cheaters who water down food products unsafely) will be punished (left to go bankrupt). Therefore reputation counts.
