Intro to Prisoner's Dilemma (class notes)

- History of Prisoner's Dilemma
- This concept was developed by a mathematician in the 1800s and was ignored for a long time.
- Then, a decision analyst and a psychologist wrote the book “Games and Decisions”, developing the Prisoner’s Dilemma concept.
- It took off in business, psychology, and decision science.

- This concept was developed by a mathematician in the 1800s and was ignored for a long time.
- 90% of the people who think that they understand Prisoner’s Dilemma, don’t.
- It is deceptively simple
- you can memorize the results
- people can get hung up on the structure, the diagram of the decision itself

- The Prisoner's dilemma is a way of understanding some dynamics in decision making
- Review of Prisoner's Dilemma:
- The goal is to get the highest score possible
- We have an actor called “she”. She has a binary choice to make: she can either choose up or down.
- If she chooses up, she’ll get a value of 15 or 0—she doesn’t know which one.
- If she chooses down, she’ll get either a 20 or a 5—she doesn’t know which one.

- There’s a second actor, called “he” with a choice between left or right.
- If he chooses left, he'll get a value of 15 or 0
- If he chooses right, he'll get a value of 20 or 5.

- They choose simultaneously.
- If they both defect, they both get 5.
- If they both cooperate, they both get 15.
- If one defects, and the other cooperates, the one defecting gets 20, with the cooperating one getting 0.
- Individually Rational = Defect
- Collectively Optimal = Cooperate
- Outcome may be individually rational but collectively suboptimal
- Cooperation can be sustained if you have the Long Shadow of the Future
- If you can change the payoff structure, rules of the game, you can create cooperation

Cooperate | Defect | |

Cooperate | 15 \ 15 | 0 \ 20 |

Defect | 20 \ 0 | 5 \ 5 |

page revision: 3, last edited: 18 Oct 2010 11:47