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HO1F10 - does not the former will walk and the latter will...

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1 G AME T HEORY IN THE S OCIAL S CIENCES Political Science 135/Economics 110 Hand out on: The Prisoner’s Dilemma. The prisoner’s dilemma is used to model many different things. The original story, which gives the game its name, goes something like this: Two suspects are arrested on suspicion of committing a felony. The police lack sufficient evidence to convict the suspects unless at least one of them confesses. So the police separate the suspects and question them in two interrogation rooms. The detectives explain that if neither suspect confesses, both suspects will be charged with a lesser crime and will spend six months in jail. If one confesses and the other
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Unformatted text preview: does not, the former will walk and the latter will be sent to prison for 5 years. If both confess, there will be some leniency and each will only do 4 years. This situation gives rise to the following strategic game: Suspect 2 Confess Not Confess Confess-4,-4 0,-5 Suspect 1 Not Confess-5,0-1/2, -1/2 This game can be solved by deleting strictly dominated strategies. However, the solution of (Confess, Confess) makes everyone worse off (i.e. is Pareto dominated by) the situation in which neither confesses. This feature of the Prisoner’s dilemma is why it has attracted so much attention....
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