prisoner's dilemma

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Prisoner's Dilemma

A classic problem in game theory. In the problem, two suspects are arrested and questioned separately by police. If one accuses the other while the other remains silent, the accuser will go free and the silent party will go to jail for 10 years. If each accuses the other, both go to prison for five years. If both remain silent, they only go to jail for one year. According to the dilemma, the rational response for each of the prisoners is to accuse the other (maximizing the possibility each will go free), even though this produces an irrational result (that both go to jail for five years).

The prisoner's dilemma is used to explain a variety of economic and political phenomena when all parties involved are self-interested, rational and have imperfect information. For example, two companies may compete for a promising employee. They offer increasingly attractive salaries. If one company gives up, the other company will take the employee. So both quite rationally increase the offers. This however could produce the irrational result that a new employee is paid too highly. The prisoner's dilemma seeks to explain why rational actions sometimes lead to irrational conclusions.

prisoner's dilemma

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Here, the prisoner's dilemma narrative might be advanced to serve libertarian ends.
For a concise explanation of prisoner's dilemma games as well as an argument that scholars often mistake coordination problems for prisoner's dilemma problems, see generally Richard H.
N-Person Prisoner's Dilemmas," Journal of Mathematical Sociology 2, 1, pp.
If this is the case, then what are economics students to make of the Prisoner's Dilemma (hereafter, PD); where the rational choice of strategy by both players collectively leads to an outcome that is suboptimal for both (Rapoport and Chammah 1965).
Second, the sum of member state fiscal bank crisis resolution costs is likely to exceed the optimal level for the European Union as a whole by far because of the prisoner's dilemmas arising from scope and size of national resolution programs.
Table 1: Tree Maintenance as a Prisoner's Dilemma Pay Don't Pay Pay 30 -10 Don't Pay 40 0
In the tree-maintenance game, for example, we assume that all interactions between the neighbors can be modeled as identical prisoner's dilemma games.
Arguing that (large) trading nations find themselves facing the incentives of a prisoner's dilemma game, in which the temptation to raise optimal tariffs against other trading nations constantly threatens the stability of an open trading system, the author attempts to identify those circumstances under which these nations will be more likely to resist that temptation.
His historical chapters are particularly weak in establishing the dynamic he claims characterizes the prisoner's dilemma (and its avoidance during the zenith of free trade).
The basic game used to examine international purchases will be the prisoner's dilemma.
This payoff function is consistent with prisoner's dilemma game.
Instead of modeling such decisions on the prisoner's dilemma, Rabe and Gillroy propose an assurance-game model in which universal cooperation, rather than being a free rider, is the preferred choice.