Prisoner’s Dilemma

Definition

The prisoner’s dilemma is a game that exhibits why two people behaving rationally might not cooperate, even when it’s in their best interest.

The original game is about two separated prisoners who cannot communicate; each must choose between cooperating with the other. If they betray each other, they will each serve two years in prison. If one betrays the other, then the crossed will do three years in prison while the other goes free. But if both keep silent, they will each serve one year.

Usually, the game is set so each individual wants to protect themself at the other’s expense. Even though an individual’s actions are rational for them, they are not for the group. By pursuing that strategy, they produce a worse outcome.

Why Use It

The game illuminates the conflict between individual and group rationality. It’s a classic paradox that portrays how acting in your self-interest doesn’t produce the most favorable outcome.

When to Use It

The prisoner’s dilemma is about circumstances where cooperation is required, and it has myriad real-world applications. Use it to understand how two people or groups could benefit more from cooperating. Yet, because it is challenging or costly to coordinate their efforts, they might choose to suffer worse consequences.

How to Use It

Knowing that folks might act outside of their own best interests is crucial in developing a strategy to overcome the prisoner’s dilemma and ensure individuals choose in favor of the common good.

In a real-world situation, people may encounter a prisoner’s dilemma-like scenario regularly, and rewarding cooperation can produce better outcomes over time. When it comes to institutions or corporations, collective action can help align individual decision-makers, such as creating rules or laws that must be followed by all parties.

The reverse, punishing a selfish choice, can similarly result in the desired behavior. So organizations or institutions that don’t follow the rules are punished, making it much easier to choose a collectively beneficial outcome.

Finally, individuals and groups often develop psychological or behavioral biases after learning to trust one another. In this case, they are more likely to be inclined to reciprocate positive behavior naturally. As a result, the individual acts irrationally and ends up choosing the best choice for the group.

    How to Misuse It

    The prisoner’s dilemma is a game and not the real world. It’s useful in constructing scenarios and defining ways to overcome acting in one’s self-interest. In practice, humans are more likely to cooperate despite the game predicting they’d do otherwise.

    Next Step

    Take a look at the world around you and define the prisoner’s dilemmas in your life. Try framing up a problem you see in your organization or utilize it as a thought experiment to frame a global issue — the possibilities are endless.

    Where it Came From

    The prisoner’s dilemma is well-known in game theory and was initially framed by Merill Flood and Melvin Dresher in 1950. Later, Albert W. Tucker updated the game with prison sentence rewards and named it the “prisoner’s dilemma.”

    What Are Mental Models?

    Mental models are thinking tools that help guide and shape our perceptions of the world. They simplify complexity so we can understand life better, make decisions confidently, and solve problems.

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