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 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).
|
A Cooperates |
A Defects | |
|
B Cooperates |
2,2 |
0,3 |
|
B Defects |
3,0 |
1,1 |
References
- ↑ Whether or not they are guilty is beside the point. If it helps you empathise with their predicament, assume they’re innocent