Prisoner's Dilemma

In its simplest form, the prisoner's dilemma refers to a mixed-motive conflict in which two interdependent decision makers have to decide whether to cooperate with each other or to defect. For each decision maker, the defect choice strictly dominates the cooperative choice (i.e., regardless of what the other person chooses, defection yields a better payoff to the individual than does cooperation). Yet both decision makers will be better off if they each choose cooperation rather than if either defects. Hence, there is a choice dilemma.

The prisoner's dilemma derives its name from a prototypic situation in which the police have arrested two people suspected of having committed a bank heist and have placed them in separate, isolated cells so that they cannot communicate. Because the police do not possess adequate material evidence for conviction, they offer each prisoner the option of testifying against the other. If one of the prisoners agrees to confess to the crime (and, in effect, betray the other), that prisoner will be set free, whereas the other prisoner will receive the maximum sentence allowable, 12 years. If both prisoners confess, each receives an intermediate sentence of 6 years. Finally, if neither prisoner confesses, both receive a minimum sentence of only 4 months for the minor offense of loitering near the scene of a crime. Obviously, both prisoners would be best off if both refuse to confess. However, each is tempted to confess. If both do so, however, both are worse off.

When first introduced, the prisoner's dilemma was viewed by social scientists as a simple but powerful analogue of many real-world situations involving interdependent social actors for whom mutual cooperation is attractive but problematic. Such situations include social exchanges, bilateral negotiations, arms races, and the allocation of shared but scarce resources. This entry looks at this line of research as it has developed over time.