Prisoner's Dilemma
Intermediate
Prisoner’s dilemma is an example of a situation where individual decision-makers, acting in their best interest, produce a suboptimal result for the individuals as a group. It is one of the most well-known examples in game theory.
The standardized example of prisoner’s dilemma, originally proposed by mathematicians Merrill Flood and Melvin Dresher, and then formalized by Albert W. Tucker, presents the following situation:
- Two members of a criminal gang are arrested and interrogated in separate rooms. There are no other witnesses available, and the authorities only possess sufficient evidence to convict one of the prisoners, but only if the other prisoner testifies against them.
- The authorities offer each prisoner a bargain. They can betray the other prisoner by testifying that the other prisoner committed the crime, or they can cooperate with the other prisoner by remaining silent.
This scenario can lead to