Prisoner's Dilemma

Definition

Beyond any doubt, Prisoner's Dilemma is the bestknown situation in which self-interest and collective interest are at odds. The situation derives its name from the classic anecdote about two prisoners who were accused of robbing a bank. In this anecdote, the district attorney, unable to prove that the prisoners were guilty, created a dilemma in an attempt to motivate the prisoners to confess to the crime. The prisoners were put in separate rooms, where each prisoner was to make a choice: to confess or not to confess.

[Page 702]The attorney sought to make confessing tempting to the prisoners by creating a situation in which the sentence was determined not only by their own confessing or not but also by the fellow prisoner's confessing or not. Yet irrespective of the fellow prisoner's choice, the choice to confess yielded a better outcome (or less worse outcome) than did the choice not to confess. Specifically, when the other confessed, confessing yielded only an 8-year sentence, whereas not confessing yielded a 10-year sentence. And when the other did not confess, confessing yielded only a 3-month sentence, whereas not confessing yielded a 1-year sentence. So, from this perspective, it seems rational for each prisoner to confess to the crime. However, the crux of the dilemma is that the outcome following from both confessing (an 8-year sentence) is worse than the outcome following from both not confessing (a 1-year sentence). Thus, if both prisoners were completely trusting of each other, and strongly committed to supporting or helping each other, neither would confess, despite the attorney's attempt to make confessing attractive. (The four possible sentences following from both prisoners' choices are derived from R. Duncan Luce and Howard Raiffa; some other sources report slightly different sentences.)

The Single-Trial Prisoner's Dilemma

This classic Prisoner's Dilemma describes a situation in which the prisoners were to make their choices simultaneously, irrevocably (i.e., they could not undo or take back their choices), and therefore independently of one another. The independence of their choices was also ensured by putting the prisoners in separate cells, thereby excluding any possibility for communication relevant to the choices that they were going to make. In doing so, the attorney created a rather uncommon situation because people are usually able to interact in ways that permit them to respond to each other's behavior or communicate about their choices.

Nevertheless, some situations that people encounter in real life resemble aspects of the classic Prisoner's Dilemma. For example, it occasionally may be tempting to prepare less than fully for a working meeting with a partner to save time and energy for another activity that is more pressing or interesting. Yet, the meeting would be more fruitful if both partners invest time and effort and prepare well for the meeting. More generally, the Prisoner's Dilemma represents exchange situations, which in the real world often occur under more flexible conditions, where both partners make choices in turn and every now and then can undo their choices. An example is the exchange of baseball cards, or cards of well-known soccer players, where two children can, at a little cost, provide each other with the card the other desires very much (e.g., to own the last card that completes one's set of cards). In that sense, the Prisoner's Dilemma represents a situation in which people “do business,” exchanging money, products, or services, that is more desirable to the other than to the self.

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