Prisoner’s dilemma
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an exercise in calculating economic outcomes by means of metaphor.
Two people are arrested and charged with a conspiracy[1]. Each person is held in solitary confinement and cannot communicate with his associate. There is enough evidence to convict them on a lesser charge, but not the main charge. Simultaneously, the police offer each prisoner a bargain. Each prisoner is given the opportunity either to betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent. The offer is:
- If A and B each betray the other, each of them serves two years in prison
- If A betrays B but B remains silent, A will be set free and B will serve three years in prison (and vice versa)
- If A and B both remain silent, both of them will only serve one year in prison (on the lesser charge).
- ↑ Whether or not they are guilty is beside the point. If it helps you empathise with their predicament, assume they’re innocent