Since midnight EST on January 18th, Wikipedia has been “blacked out” in protest of the upcoming congressional bills to counter internet piracy. Wikipedia and other critics of the Stop Online Piracy Act (SOPA) and Protect IP Act (PIPA) attack these bills as restricting freedom of speech by allowing copyright holders to disrupt traffic to sites allegedly infringing upon intellectual property rights. In addition to Wikipedia, Facebook and Twitter also strongly oppose these bills, though neither of these social network behemoths joined in solidarity with Wikipedia’s blackout. In fact, Twitter CEO, Dick Costolo, criticized the blackout as “foolish.” If Facebook and Twitter are as opposed to SOPA as they previously claimed, why don’t they also wield their internet power by also blacking out?
I offer a simple explanation using basic game theory. Suppose that Twitter and Facebook are the only social networks around and that they compete for active users. Suppose further that Twitter and Facebook will base their entire decision to black out on how doing so will affect (i) user activity and (ii) the SOPA protest (which we suppose can only succeed if at least one of the companies blacks out). Both companies know that the effect of a blackout on user activity will depend on what the other company does. For example, if Twitter is blacked out, Twitter users will migrate to Facebook and vice versa. In fact, the blackout will no doubt provide additional material for users to comment upon, thereby providing the still-operating company an even greater boost in activity. Under these circumstances we expect Facebook and Twitter to form their strategy based upon what they think their opponent will do.
The contrived world I’ve created consists of four possibilities: both blackout, Twitter stays online and Facebook blacks out, Twitter blacks out and Facebook stays online, and both stay online. Each company prefers certain outcomes over others, which are described in the following table.
Based on the description of these outcomes, we can rank each company’s preferences, which are denoted with 4 being the most preferred outcome. The first number corresponds to Twitter’s ranking while the second is Facebook’s.
Stated in this way, our initial question of why these companies don’t blackout is even more puzzling. Why are they ending up in their least preferred cell? The answer is based on game theory’s most famous game, the prisoner’s dilemma.
Notice that Twitter gets to choose the row while Facebook chooses the column and together their decisions determine the cell. A useful comparison for Twitter therefore is to compare the first number of each cell with the first number of the cell directly above or below it. For example, blackout (T), blackout (F) is 3 for Twitter while stay online (T), blackout (F) is 4, meaning that Twitter prefers the second outcome to the first.
It turns out that when we do this same operation for each cell from each company’s perspective, each company always prefers to stay online no matter what they expect their opponent to do. The remarkable result is that doing so means that both companies stay online and fail to adequately protest.