theprisoners’dilemmaandthemini-maxstrategy.docVIP

THE PRISONERS’ DILEMMA AND THE MINI-MAX STRATEGY By Charles Warner The Prisoners’ Dilemma The Prisoners’ Dilemma is perhaps the best-known strategic game, as suggested by Dixit and Nalebuff, and it illustrates how cooperation is often the best strategy. The Prisoners’ Dilemma also is useful for demonstrating how to use two very useful decision tools, a decision tree and a payoff matrix, and how to employ a mini-max strategy. Suppose that in Russia during the Stalin era, a conductor of an orchestra was traveling by train and was reading the score of the music he was to conduct at his next engagement. Two KGB policemen watched him reading and, thinking that the musical notations were some secret code, arrested him as a spy. The conductor protested that it was only Tchaikovsky’s Violin Concerto, but with no success. On the second day of his imprisonment, an interrogator walked up to the conductor and said confidently, “You had better tell us everything you know. We have caught your friend Tchaikovsky, and he is already talking.” The KGB had, in fact, picked up a man whose only offense was that he was named Tchaikovsky, and they were subjecting him to the same kind of intense interrogation. If the two innocents withstand this treatment and confess nothing, they will both get off with a relatively mild three-year sentence (the standard punishment at that time for doing nothing). On the other hand, if the conductor makes a false confession and implicates Tchaikovsky while Tchaikovsky holds out, the conductor gets a reduced sentence of one year and Tchaikovsky gets the maximum sentence of 25 years for being recalcitrant. Of course, the tables will be turned if the conductor stands firm and Tchaikovsky gives a false confession and implicates the conductor (25 years for the conductor, one year for Tchaikovsky). If both give false confessions and implicate the other person, then both get a reduced sentence of 10 years. If neither one of them conf