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The Prisoner's Dilemma
The prisoner's dilemma is the story of two
criminals who have been arrested for a heinous crime and are
being interrogated separately. Each knows that if neither of
them talks, the case against them is weak and they will be
convicted and punished for lesser charges. If this happens,
each will get one year in prison. If both confess, each will
get 20 years in prison. If only one confesses and testifies
against the other, the one who did not cooperate with the
police will get a life sentence and the one who did
cooperate will get parole. The table below illustrates the
structure of payoffs.
Given this set of payoffs, there is a strong tendency for
each to confess, which you can be see by considering the
choices and payoffs of either one. If prisoner A
remains silent, prisoner B is better off confessing
(because parole is better than a year in jail). However,
B is also better off confessing if A confesses
(because 20 years is better than life). Hence, B will
tend to confess regardless of what A will do; and by
an identical argument, A will also tend to
confess.
The prisoner's dilemma is a case in which actions
determined by self-interest are not in the group's interest
(where the group is defined to include only the criminals,
not the larger society). It is a story that would have
pleased Thomas Hobbes, a political theorist of the mid-17th
century. Hobbes is a grandparent of economics because he
introduced into intellectual discussion two assumptions:
first, that the individual is the starting point of social
analysis, and, second, that people are motivated by
self-interest. He believed that the unrestrained pursuit of
self-interest would result in chaos and that government,
with its power to coerce people, was necessary to bring
order out of chaos.
Copyright
Robert Schenk
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