Prisoner's dilemma

The normal game is shown below:

	Prisoner B stays silent (cooperates)	Prisoner B betrays (defects)
Prisoner A stays silent (cooperates)	Each serves 3 month	Prisoner A: 12 months Prisoner B: goes free
Prisoner A betrays (defects)	Prisoner A: goes free Prisoner B: 12 months	Each serves 2 months

Here, regardless of what the other decides, each prisoner gets a higher pay-off by betraying the other. For example, Prisoner A can (according to the payoffs above) state that no matter what prisoner B chooses, prisoner A is better off 'ratting him out' (defecting) than staying silent (cooperating). As a result, based on the payoffs above, prisoner A should logically betray him. The game is symmetric, so Prisoner B should act the same way. Since both rationally decide to defect, each receives a lower reward than if both were to stay quiet. Traditional game theory results in both players being worse off than if each chose to lessen the sentence of his accomplice at the cost of spending more time in jail himself.


The Prisoner's Dilemma has a similar matrix as depicted for the Coordination Game, but the maximum reward for each player (in this case, 5) is only obtained when the players' decisions are different. Each player improves his own situation by switching from "Cooperating" to "Defecting," given knowledge that the other player's best decision is to "Defect." The Prisoner's Dilemma thus has a single Nash Equilibrium: both players choosing to defect.
What has long made this an interesting case to study is the fact that this scenario is globally inferior to "Both Cooperating." That is, both players would be better off if they both chose to "Cooperate" instead of both choosing to defect. However, each player could improve his own situation by breaking the mutual cooperation, no matter how the other player possibly (or certainly) changes his decision.

Example PD payoff matrix

	Cooperate	Defect
Cooperate	3, 3	0, 5
Defect	5, 0	1, 1