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Information Asymmetry: The Informed Minority Advantage

Information is power.

Jerry Silfwer
by Jerry Silfwer

Cover photo: @jerrysilfwer

Table of contents

Numerous pop­u­lar games rely on inform­a­tion asymmetry.

What is the con­nec­tion between the games Werewolf, Mafia, The City of Palermo, Among Us, Secret Hitler, The Resistance, Spyfall, and The Town of Salem, and the psy­cho­lo­gic­al dynam­ics of informed minor­it­ies and uni­formed majorities?

And what does inform­a­tion asym­metry mean for pub­lic relations?

Here we go:

Enter: Information Asymmetry

Information Asymmetry

The concept of “inform­a­tion asym­metry” is a psy­cho­lo­gic­al effect in which one party in a trans­ac­tion or situ­ation has more or bet­ter inform­a­tion than the oth­er. It is a cru­cial concept in eco­nom­ics and game theory.

In eco­nom­ic terms, inform­a­tion asym­metry was extens­ively explored by George Akerlof, Michael Spence, and Joseph E. Stiglitz, who won the Nobel Prize in Economics in 2001 for ana­lys­ing mar­kets with asym­met­ric inform­a­tion. While their work is primar­ily in eco­nom­ics, the prin­ciples broadly apply to situ­ations where unequal inform­a­tion dis­tri­bu­tion affects decision-mak­ing. 1Information asym­metry. (2023, December 11). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​I​n​f​o​r​m​a​t​i​o​n​_​a​s​y​m​m​e​try

Information asym­metry is dynam­ic, where the informed advant­age is some­times good, some­times bad.

“Information asym­metry neg­at­ively impacts per­form­ance in goods set­tings and pos­it­ively in ser­vices set­tings, while inform­a­tion shar­ing has stronger favour­able effects in con­sumer mar­kets and is weak­er in rela­tion­ships over 6 years old.”
Source: Industrial Marketing Management 2Tong, P., & Crosno, J. (2016). Are inform­a­tion asym­metry and shar­ing good, bad, or con­text depend­ent? A meta-ana­lyt­ic review. Industrial Marketing Management, 56, 167 – 180. … Continue read­ing

Learn more: Information Asymmetry: The Informed Minority Advantage

Dmitry Davidoff and “Mafia”

In the cor­ridors of Moscow State University, a young psy­cho­logy lec­turer named Dmitry Davidoff pondered a unique challenge:

How could he make his human beha­viour and psy­cho­logy les­sons inform­at­ive and irres­ist­ibly enga­ging? 3Mafia (party game). (2024, January 13). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​M​a​f​i​a​_​(​p​a​r​t​y​_​g​ame)

In the spring of 1987, the Soviet Union was a world of its own, and Moscow was its heart. Davidoff, a man with a keen eye for the com­plex­it­ies of human nature, had an idea brew­ing — a game, but not just any game. He envi­sioned a game that would be a mir­ror to the human psyche, a dance of deceit and deduction.

In a classroom filled with psy­cho­logy stu­dents, Davidoff intro­duced the game “Mafia.” Each stu­dent was assigned a secret role in this game — some became vil­la­gers, while a select few were des­ig­nated as the cun­ning Mafia. The Mafia mem­bers were privy to each other’s iden­tit­ies, but the vil­la­gers were left in the dark, ignit­ing a fas­cin­at­ing dynam­ic of inform­a­tion asymmetry.

The game unfol­ded in turns. By night, the Mafia would silently agree to “elim­in­ate” a vil­la­ger. By day, the entire group would debate and decide who they sus­pec­ted to be part of the Mafia, sub­sequently “elim­in­at­ing” them from the game. The catch? The Mafia mem­bers, hid­den in plain sight, were part of these dis­cus­sions, sow­ing con­fu­sion and misdirection.

Students, usu­ally bogged down by the­ory and text­books, were now detect­ives and strategists, read­ing body lan­guage, ana­lys­ing speech pat­terns, and form­ing alli­ances. Davidoff watched as his game became a liv­ing lab of trust and betray­al, a micro­cosm of soci­ety itself.

In the early 1990s, the game crossed bor­ders, intriguing minds in Europe and America, evolving with each new cul­ture. It inspired game vari­ations, movies, and TV shows, tak­ing on a life far bey­ond what Davidoff could have imagined.

With his simple yet ingeni­ous game, Dmitry Davidoff had not only evolved how psy­cho­lo­gic­al con­cepts could be taught and under­stood but had also ignited a cul­tur­al phenomenon. 

The Werewolf Game

The Werewolf game is a clas­sic example of how inform­a­tion asym­metry can be used stra­tegic­ally, high­light­ing the advant­age of hav­ing more or bet­ter inform­a­tion in a com­pet­it­ive environment. 

The Werewolf Game - Playing Cards - Information Asymmetry
Werewolf is a game based on inform­a­tion asymmetry.

The Werewolf game has become a pop­u­lar tool for teach­ing these con­cepts in a fun and inter­act­ive way. The inform­a­tion­al advant­age of the were­wolves usu­ally makes them more likely to win, as they can coördin­ate their actions and manip­u­late the unin­formed major­ity. 4Andrew Plotkin. (2022, October 10). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​A​n​d​r​e​w​_​P​l​o​t​kin

Social Psychology — Or Mathematics?

The dynam­ics of games like Werewolf can be stud­ied from both social psy­cho­logy and math­em­at­ic­al per­spect­ives, as they encom­pass ele­ments of both fields.

The social psy­cho­logy per­spect­ive focuses on under­stand­ing how indi­vidu­als behave, com­mu­nic­ate, and make decisions with­in a group. It exam­ines per­sua­sion, trust, decision-mak­ing under pres­sure, group dynam­ics, and the psy­cho­lo­gic­al aspects of decep­tion and detec­tion. This per­spect­ive is par­tic­u­larly rel­ev­ant in ana­lys­ing play­er inter­ac­tions, strategies, and the impact of group beha­viour on indi­vidu­al choices.

From a math­em­at­ic­al stand­point, par­tic­u­larly game the­ory, the focus is on strategy, prob­ab­il­ity, decision-mak­ing, and the logic­al struc­ture of the game. 5Information asym­metry. (2023, December 11). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​I​n​f​o​r​m​a​t​i​o​n​_​a​s​y​m​m​e​try

Game the­ory can provide insights into optim­al strategies, the prob­ab­il­it­ies of dif­fer­ent out­comes, and the impact of vari­ous rules or vari­ations on the game’s balance. 

To fully appre­ci­ate and under­stand games like Werewolf, it’s bene­fi­cial to con­sider both social psy­cho­logy for the human inter­ac­tion ele­ment and math­em­at­ics for the stra­tegic and prob­ab­il­ist­ic aspects. This mul­tidiscip­lin­ary approach allows a more com­pre­hens­ive under­stand­ing of the game’s dynam­ics and the inter­play between strategy, psy­cho­logy, and decision-making.

“Among Us” and Information Asymmetry

”Among Us” is a game that heav­ily relies on inform­a­tion asym­metry, much like Mafia/​Werewolf. 6Among Us. (2024, January 13). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​A​m​o​n​g​_Us

Among Us - Information Asymmetry
Will the imposter win?

In Among Us, play­ers are part of a space­ship crew, among whom are a few impost­ors. The impost­ors know each other’s iden­tit­ies (if there’s more than one), but the rest of the crew does not. 

The goal for the impost­ors is to sab­ot­age the ship and elim­in­ate crew mem­bers without being dis­covered, while the crew aims to com­plete tasks and fig­ure out who the impost­ors are.

The game’s core revolves around inform­a­tion asym­metry: the impost­ors have more inform­a­tion than the crew mem­bers and must use this advant­age to mis­lead and deceive. Similarly, the crew mem­bers must use com­mu­nic­a­tion, obser­va­tion, and deduc­tion to identi­fy the impost­ors with lim­ited information.

Information Asymmetry in Other Games

Several oth­er games besides Mafia/​Werefolf util­ise inform­a­tion asymmetry:

  • Secret Hitler. A social deduc­tion game where play­ers are secretly divided into two teams — lib­er­als and fas­cists, with one play­er being Secret Hitler. The fas­cists know each oth­er, while the lib­er­als don’t. The goal for the fas­cists is to pass fas­cist policies or elect Secret Hitler, while the lib­er­als aim to pass lib­er­al policies or dis­cov­er and stop Secret Hitler.
  • The Resistance. In this game, play­ers are res­ist­ance oper­at­ives, but some are secretly spies. Like in “Among Us,” the spies know each oth­er, but the res­ist­ance mem­bers do not. The object­ive is for the res­ist­ance to com­plete mis­sions, while the spies aim to sab­ot­age them.
  • Spyfall. This is a party game where play­ers are giv­en loc­a­tions, but one play­er receives a card that says “spy” instead. The spy doesn’t know the loc­a­tion, while the oth­er play­ers do. Players then take turns ask­ing each oth­er ques­tions to fig­ure out who the spy is while the spy tries to blend in and guess the location.
  • Town of Salem. A game inspired by Mafia and Werewolf, where play­ers are assigned vari­ous roles with dif­fer­ent abil­it­ies and align­ments. Some play­ers have roles align­ing with the town, oth­ers are Mafia, Serial Killers, Arsonists and Neutrals. Each role has dif­fer­ent levels of inform­a­tion and objectives.

These games high­light the dynam­ics of bluff­ing, deceit, and stra­tegic think­ing that arise from inform­a­tion asym­metry, mak­ing them enga­ging and often reveal­ing about human beha­viour and interaction.

Several TV shows and films have been inspired by the concept of inform­a­tion asym­metry, sim­il­ar to the dynam­ics found in games like Mafia, Werewolf, or Among Us. 

Here are a few not­able examples:

  • Among Us: The Series (2021). This web series is dir­ectly inspired by the pop­u­lar game “Among Us.” The show mir­rors the game’s premise, where a group of astro­nauts must find the impost­or among them before it’s too late.
  • The Thing (1982). Although not dir­ectly based on these games, John Carpenter’s clas­sic film “The Thing” shares a sim­il­ar theme. Antarctic research­ers encounter a shape-shift­ing ali­en that assumes the appear­ance of the people it kills, cre­at­ing para­noia and dis­trust with­in the group.
  • The Mole (TV Series, 2001 – 2008). This real­ity game show had con­test­ants work togeth­er to com­plete vari­ous tasks. However, one group mem­ber, “the Mole,” secretly works against the oth­ers. The play­ers must fig­ure out who the Mole is while the Mole tries to sab­ot­age their efforts.
  • Werewolves Within (2021). A film adapt­a­tion of the video game of the same name, which in turn is inspired by the social deduc­tion game Werewolf. It’s set in a small town where res­id­ents must dis­cov­er who among them is a werewolf.
  • Dead of Winter (Short Film, 2014). Inspired by the board game “Dead of Winter,” this film fol­lows a group of sur­viv­ors in a post-apo­ca­lyptic world who must deal with intern­al and extern­al threats, includ­ing the pos­sib­il­ity of a betrayer.
  • Secret Hitler (Rumored/​In Development). While not yet a film or TV show, there have been dis­cus­sions and rumours about adapt­ing the social deduc­tion game “Secret Hitler” into a film or series, giv­en its enga­ging premise of hid­den iden­tit­ies and polit­ic­al intrigue.

These shows and films cap­ture the essence of ten­sion, sus­pi­cion, and the chal­lenges of decision-mak­ing under uncer­tainty, sim­il­ar to the dynam­ics in social deduc­tion games.

Ethical Implications of Information Asymmetry

In the 2nd cen­tury BCE, the Greek Stoics told the tale of the Merchant of Rhodes. 

During a fam­ine, mul­tiple grain mer­chants from Alexandria embarked on voy­ages to sup­ply grain. One mer­chant, arriv­ing before oth­ers, was faced with a pivotal decision: should he inform the Rhodians about the impend­ing grain sup­plies or keep this inform­a­tion to him­self, thus influ­en­cing his profits? 

In his work “De Officiis,” Cicero recoun­ted this story and con­curred with the Stoics that the mer­chant was mor­ally bound to dis­close the inform­a­tion. However, this view­point was later chal­lenged by Thomas Aquinas, who argued that dis­clos­ing prices was not a mor­al neces­sity. 7Cicero, M. T. (n.d.). De Officiis. (W. Miller, Trans.). Harvard University Press. (Original work pub­lished ~44 BCE)

In pub­lic rela­tions, the dom­in­at­ing the­ory is the Excellence Approach (i.e., the four mod­els of pub­lic rela­tions), favour­ing a sym­met­ric approach as the ideal state. However, the Rhetoric Approach is more open to asym­met­ric meth­ods of per­sua­sion. 8Silfwer, J. (2022, November 6). 3 PR Approaches: Excellence, Rhetorical, and Critical. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​p​r​-​a​p​p​r​o​a​c​h​es/

The Four Models of Public Relations

The Four Models of Public Relations

In the Excellence study, James Grunig and Todd Hunt (1984) developed the most widely cited PR mod­el in aca­dem­ic circles. 

Four Models of Public Relations - Doctor Spin - The PR Blog
The four mod­els of pub­lic relations.

It’s not one mod­el but four in sequence. 

Grunig and Hunt’s four mod­els of pub­lic rela­tions provide valu­able insights into the evol­u­tion of com­mu­nic­a­tion strategies and their implic­a­tions for mod­ern businesses.

  • PR Model 1: Press Agentry Model. The organ­isa­tion uses media manip­u­la­tion to shape the nar­rat­ive deceptively.
  • PR Model 2: Public Information Model. The organ­isa­tion is prac­tising one-way com­mu­nic­a­tion to dis­sem­in­ate inform­a­tion with little or no feed­back from recipients.
  • PR Model 3: Two-Way Asymmetrical Model. The organ­isa­tion engages in two-way com­mu­nic­a­tion to per­suade and estab­lish power structures. 
  • PR Model 4: Two-Way Symmetrical Model. The organ­isa­tion engages in two-way com­mu­nic­a­tion to find com­mon ground and mutu­al benefits.

The four mod­els of pub­lic rela­tions as a frame­work can be con­sidered a corner­stone of the Excellence Approach. 9Silfwer, J. (2022, November 6). 3 PR Approaches: Excellence, Rhetorical, and Critical. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​p​r​-​a​p​p​r​o​a​c​h​es/

The Excellence Approach. This pub­lic rela­tions approach focuses on object­ives and cor­por­ate value cre­ation. The under­ly­ing motiv­a­tion behind the the­ory was that pub­lic rela­tions were mainly a vari­ety of tac­tic­al tools that des­per­ately needed a man­age­ment the­ory to work well in a soph­ist­ic­ated organ­isa­tion.

Notable men­tions: James E. Grunig, Larissa A. Grunig

The res­ult? The research­ers con­cluded that the two-way sym­met­ric­al mod­el is the most effect­ive way to prac­tice pub­lic relations.

“The study of rela­tion­ships with­in pub­lic rela­tions has become increas­ingly import­ant, with the Grunigs identi­fy­ing test­able vari­ables to meas­ure the qual­ity of organ­iz­a­tion­al rela­tion­ships.”
Source: Journal of Professional Communication 10Grunig, J. (2011). Public rela­tions excel­lence 2010. Journal of Professional Communication, 1. https://​doi​.org/​1​0​.​1​5​1​7​3​/​J​P​C​.​V​1​I​1​.85

Learn more: The Four Models of Public Relations

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ANNOTATIONS
ANNOTATIONS
1, 5 Information asym­metry. (2023, December 11). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​I​n​f​o​r​m​a​t​i​o​n​_​a​s​y​m​m​e​try
2 Tong, P., & Crosno, J. (2016). Are inform­a­tion asym­metry and shar­ing good, bad, or con­text depend­ent? A meta-ana­lyt­ic review. Industrial Marketing Management, 56, 167 – 180. https://​doi​.org/​1​0​.​1​0​1​6​/​J​.​I​N​D​M​A​R​M​A​N​.​2​0​1​5​.​1​1​.​004
3 Mafia (party game). (2024, January 13). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​M​a​f​i​a​_​(​p​a​r​t​y​_​g​ame)
4 Andrew Plotkin. (2022, October 10). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​A​n​d​r​e​w​_​P​l​o​t​kin
6 Among Us. (2024, January 13). In Wikipedia. https://​en​.wiki​pe​dia​.org/​w​i​k​i​/​A​m​o​n​g​_Us
7 Cicero, M. T. (n.d.). De Officiis. (W. Miller, Trans.). Harvard University Press. (Original work pub­lished ~44 BCE)
8, 9 Silfwer, J. (2022, November 6). 3 PR Approaches: Excellence, Rhetorical, and Critical. Doctor Spin | The PR Blog. https://​doc​tor​spin​.net/​p​r​-​a​p​p​r​o​a​c​h​es/
10 Grunig, J. (2011). Public rela­tions excel­lence 2010. Journal of Professional Communication, 1. https://​doi​.org/​1​0​.​1​5​1​7​3​/​J​P​C​.​V​1​I​1​.85
Jerry Silfwer
Jerry Silfwerhttps://doctorspin.net/
Jerry Silfwer, alias Doctor Spin, is an awarded senior adviser specialising in public relations and digital strategy. Currently CEO at Spin Factory and KIX Communication Index. Before that, he worked at Kaufmann, Whispr Group, Springtime PR, and Spotlight PR. Based in Stockholm, Sweden.

The Cover Photo

The cover photo isn't related to public relations obviously; it's just a photo of mine. Think of it as a 'decorative diversion', a subtle reminder that it's good to have hobbies outside work.

The cover photo has

A girl holding a yellow leaf in front of her face.
A girl holding a yellow leaf in front of her face.

.

Shareable:
Information asymmetry is a key concept in economics, referring to situations where one party has more or better information than the other.
Shareable:
The game "Mafia" is an example of information asymmetry in action, with hidden roles leading to a complex dynamic of trust and deception.
Shareable:
Nobel laureates Akerlof, Spence, and Stiglitz highlighted the significance of information asymmetry in markets.
Shareable:
Information asymmetry can have both positive and negative impacts on performance and decision-making.
Shareable:
Social deduction games like "Werewolf" and "Among Us" utilise the concept of information asymmetry to create engaging gameplay.
Shareable:
In games, information asymmetry leads to strategies of bluffing and deceit, reflecting similar dynamics in real-world situations.
Shareable:
Popular culture, including TV shows and movies, often explores themes of information asymmetry, mirroring the tension and uncertainty in games.
Shareable:
The ethical implications of information asymmetry have been debated since ancient times, reflecting its complex nature.
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Information is power.

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