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 arrested and charged with a conspiracy[1]. Each is held separately in solitary confinement. The two cannot communicate. The authorities have enough evidence to convict both on a lesser charge, but not the main charge. The authorities go to each prisoner separately and offer each the same bargain if she agrees to inform on her co-conspirator. The offer is:
- If A informs B but B refuses to inform on A:
- A will not be prosecuted on the lesser charge and will go free
- B will be prosecuted on the main charge and serve a three year sentence
- If A informs B and B informs on A:
- A will serve a two year sentence
- B will serve a two year sentence
- If A refuses to inform on B and B refuses to inform on A:
- A will serve a one year sentence (on the lesser charge).
- B will serve a one year sentence (on the lesser charge).
References
- ↑ Whether or not they are guilty is beside the point. If it helps you empathise with their predicament, assume they’re innocent