Prisoner’s dilemma

Episode #2 of the course “Brain-twisting paradoxes”

The prisoner’s dilemma illustrates how, when two people have the chance to either play as a team or against each other, it always makes sense to play as a team, yet no one ever does because from an individual standpoint, the risks are too great. For example:

Jack and Jill get arrested for a crime the police can’t prove unless one of them rats the other out. The police tell each person the same thing: “Talk and you’ll go free while your partner goes to jail for 3 years. Don’t talk and you run the risk of your partner ratting you out, and you go to jail for 3 years.” If Jack and Jill both don’t talk, they each get 1 year in prison for a lesser crime. If they both talk and rat each other out, they both get 2 years behind bars.

From a team perspective, one year each is the best outcome. The problem is when Jack and Jill start thinking from an individual perspective—each thinks, “Well, 0 years is better than 1 year, so I’m going to rat the other out.” But if they both think this, then they both rat each other out, and instead of getting off scot-free, they get sentenced to 2 years in prison.

The prisoner’s dilemma has implications beyond warfare and interrogator-trickery. Competing companies have to take this dilemma into account during marketing strategies as well. The basic assumption in all these scenarios is that people are “rational agents” who will always do what’s best for themselves.

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