Safety, Off-shore oil rig workers, and game theory

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080723-N-0780F-002 SOUDA BAY, Crete, Greece (J...

Not the Gulf, but WordPress just made this one so easy! Image via Wikipedia

I was about to drift comfortably off into the Bordeaux vineyards tonight when a story in the Wall Street Journal caught my attention. As they do, the WSJ triumphantly pointed out that off-shore oil drilling in the Gulf of Mexico is back at pre-disaster levels.

Before dwelling too long on whether this development was good or bad news, I turned my attention away from the important issue to a minor detail of the story. Apparently, US regulators are considering giving any worker the power to stop drilling if they suspect that something might be going wrong.

I know what you are thinking…what could possibly go wrong with drilling 3000 feet below the ocean’s surface into highly pressurized rock?! Leaving that aside, let’s consider the options for a worker who suspects something might be going wrong.

Option 1 – The worker suspects something is awry, but says nothing. In this case, there are two possible outcomes:

  • Outcome 1 – Nothing happens. The worker goes back to his cabin, tells himself that the accident was not that close to happening, and never says another word about it – until he’s retired and the next oil spill happens, at which point he clearly remembers telling his superiors of the pending doom.
  • Outcome 2 – The pipe breaks, the oil just won’t seem to do what it’s told, and mayhem ensues. Let’s assume there is no explosion and no one is injured. No one blames the worker, but the CEO is caught taking a vacation and the uproar falls upon her.

Option 2 – the worker reports the problem. Again, the outcomes are twofold:

  • Outcome 1 – Nothing happens. A minor correction is made before the situation gets out of control. The worker is made to look a bit ridiculous for raising such a minor issue rather than just performing a quick fix and getting back to work. Deep down, superiors suspect he may be lazy and just wanted to get a quick break from work. In the meantime, the worker has to go through the hassle of filling out paperwork, being interviewed by compliance personnel, and otherwise disrupting a semi-comfortable existence. Ok, maybe not the last part, but he gets paid enough to put up with the everyday nonsense. But not this nonsense.
  • Outcome 2 – The pipe breaks anyway. The worker noticed the problem when it was already too late. Now, he becomes the center of attention and possibly even the investigation. Ultimately, everyone recognizes that the causes go much deeper than one worker who noticed the problem too late, but the worker is forever associated with the failure.

Which option do you think people normally choose? The scary thing is, we could do the same exercise for anyone at any level.

In game theory, a Nash equilibrium results when each player knows the strategies of the other player(s), and no one can improve their destiny by any unilateral decision they may make. The result is not necessarily good for anyone. Oil rig, meet Nash.

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