Prisoner’s dilemma
|
Pay-off table |
A cooperates |
A defects |
|
B cooperates |
A gets 1 year |
A goes free |
|
B defects |
A gets 3 years |
A gets 2 years |
An exercise in calculating economic outcomes by means of metaphor. Two people are charged with a conspiracy[1]. Each is held separately. They cannot communicate. There is enough evidence to convict both on a lesser charge, but not the main charge. Each prisoner is separately offered the same plea bargain. The offer is:
- If A informs B but B refuses to inform on A:
- A will not be prosecuted at all and will go free
- B will be convicted of the main charge and will get 3 years in prison.
- If A informs B and B informs on A:
- A will get 2 years in prison
- B will get 2 years in prison
- If A refuses to inform on B and B refuses to inform on A:
- A will get 1 year in prison (on the lesser charge).
- B will get 1 year in prison (on the lesser charge).
The prisoner’s dilemma is a thought process which replicates the incentives present when participants buy or sell in the market.
single round prisoner’s dilemma
If you play this game in isolation the payoff is grim: if you cooperate you get reamed. Your best interest is in informing on the other guy, because his best interest is in forming on you.
This look
See also
References
- ↑ Whether or not they are guilty is beside the point. If it helps you empathise with their predicament, assume they’re innocent