The key take-away that helps explain the prisoner's dilemma is that each individual always has the incentive to create a less than optimal outcome for themselves and the other person. It is easier to think of it as selfishness, though it is better defined through rational decision-making and incentives, especially in economics. People have the option of cooperating with the other, however, they choose not to.
One example of The Prisoner's Dilemma in economics is the Tragedy of the Commons. The situation in the case of the Tragedy of the Commons is that every individual has the incentive to consume a resource until it is completely depleted. The result is overconsumption, underinvestment, and the complete depletion of a resource.
The Tragedy of the Commons can be observed throughout history. One example is the collapse of the North Atlantic cod fisheries in 1993. Basically, there was overfishing of cod, which led to the complete depletion of codfish and therefore the collapse of the North Atlantic cod fisheries.
It seems that The Prisoner's Dilemma always has a negative or unfortunate outcome. Many likely question whether or not there is a positive outcome to The Prisoner's Dilemma. The answer is, it depends. In general, laws, rules, enforcement, and other actions such as these help one to escape The Prisoner's Dilemma because it alters their incentives. With altered incentives to better cooperate, individuals may be forced to cooperate or decide that it is for the better.
- https://www.investopedia.com/terms/p/prisoners-dilemma.asp
- https://www.investopedia.com/terms/t/tragedy-of-the-commons.asp
- http://marinespecies.org/introduced/wiki/The_tragedy_of_the_commons:_Is_the_Newfoundland%27s_cod_crisis_a_good_example%3F
The Prisoner's Dilemma seems to suggest that sometimes, morality has an influence on rational decision making. If you both know that the other will help you, then both will realize that the most rational choice is to help the other and stay silent. However, if the other prisoner is unknown, the smartest decision is to rat them out even knowing that they'll probably rat you out in turn, in order to avoid the longer 3 year sentence that results if you're silent and they're not.
ReplyDeleteThis reminds me of those game shows where each contestant gets two options. If they both say yes they get no money. If one says yes they get $10,000. If they both say no they each get $5,000. This becomes the dilemma it morally right to say no in the hopes you both win. But at the same time you want to play defense and say yes so that you can not get screwed.
ReplyDeleteI thought of that too! I think it need to add a prerequisite, that you‘re playing the game with someone you know. When people meet someone they don't know well, they tend to choose to protect their own interests and be more defensive to others, so they often choose "yes" because there are only two outcomes: 1. The person who said yes gets the money; 2. both of them said "yes" and no one gets the money. It looks like there's a 50 percent chance of benefiting, and people usually take that into account.
DeleteYou'd think that it would be optimal to try and benefit yourself at the expense of the other person but it turns out its not. It is interesting that based on game theory the smarter thing to do is compromise or team up. It think it is also super cool than you can apply game theory to so many different scenarios not just games.
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