The Prisoner's Dilemma

Abstract

This chapter focuses on the best-known game in game theory, the prisoner's dilemma. It begins with the development of the game at the RAND Corporation. Classical economics is based on the idea that the greatest good is achieved by pursuing individual self-interest and this simple two-by-two game demonstrates that the “rational” choice could be to behave in a seemingly non-rational way; that the superior outcome could be achieved through cooperation. The standard story developed by Albert Tucker that gave the game the name “prisoner's dilemma” is described. The basic prisoner's dilemma matrix is presented and the ranking of utility payoffs is listed along with the names for the payoffs used by Sugden and many others: the “trust” payoff, the “nasty” payoff, the “sucker” payoff. Examples of the prisoner's dilemmas from everyday life and international relations are given, as is Schelling's struggle against the prisoner's dilemma of the Cold War arms race, where he worked to achieve gains in arms control. The final part of the chapter mentions references to the prisoner's dilemma in recent journalism from around the world, showing its wide acceptance as a term for situations in which individual self interest harms group benefit.