Prisoners’Dilemma.pptVIP

Prisoners’ Dilemma Scenario: You and an accomplice are arrested on suspicion of committing some nasty crime The District Attorney and the police have been unable to produce enough evidence to convict you of that offense Prisoners’ Dilemma We do have enough evidence to convict you of some lesser charge The only way the DA can nail you for the more serious offense is if one of you rats out the other Conversely, you and your partner can largely elude prosecution if you both stay silent You and your partner are placed in separate holding cells and are unable to communicate with each other DA enters and offers you the following: Prisoners’ Dilemma Generalized Form: Rank Outcomes, from most preferred to least preferred 1 first choice 2 second choice 3 third choice 4 fourth choice Choice is “cooperate” or “not cooperate” Prisoners’ Dilemma Symbolic Form: We’re in a Prisoner’s Dilemma situation whenever: T R P S Temptation to defect Rewards of Cooperation Rewards Punishment for Not Cooperating Punishment Sucker’s Payoff Prisoners’ Dilemma Note that even if we start at the cooperative outcome, that outcome is not stable Each player can improve his/her position by adopting a different strategy Prisoners’ Dilemma But since both players have changed strategy we end up at the non-cooperative outcome, where both players are worse off than if they had chosen to cooperate Prisoners’ Dilemma And, as we noted, this non-cooperative outcome is also a Nash equilibrium outcome; Neither player has any incentive to change strategy since whoever changes will do immediately worse by making the move PD Interest Group If a “collective good” is involved, individuals have little incentive to work towards achieving that good. Makes sense for others to do the work and sit back and reap the benefits of their labor But if that’s the case, then no one will do the work and the collective benefit won’t be delivered * Rat Rat Hang Tough Hang Tough Prisoners’ Dilemma Don’t Cooper