Vaniver comments on Nash Equilibria and Schelling Points - Less Wrong
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I see 1 rational pirate and 4 utter morons who have paid so much attention to math that they forgot to actually win. I mean, if they were "less rational", they'd be inclined to get outraged over the unfairness, and throw A overboard, right? And A would expect it, so he'd give them a better deal. "Rational" is not "walking away with less money".
It's still an interesting example and thank you for posting it.
Remember, this isn't any old pirate crew. This is a crew with a particular set of rules that gives different pirates different powers. There's no "hang the rules!" here, and since it's an artificial problem there's an artificial solution.
D has the power to walk away with all of the gold, and A, B, and C dead. He has no incentive to agree to anything less, because if enough votes fail he'll be in the best possible position. This determines E's default result, which is what he makes decisions based off of. Building out the game tree helps here.