Prisoner's
Dilemma (PD) is the most famous dilemma game. Two men are accused of a crime.
They are separated and each is asked to testify against the other. If both
refuse, then both receive light sentences on a lesser charge. If both agree,
then both receive moderate sentences reduced as a reward for their testimony.
However, if one agrees to testify and the other refuses, then the former goes
free while the later receives a stiff sentence.
Here's
a typical playoff matrix:
|
Payoffs |
B |
||
|
FALSE |
TRUE |
||
|
A |
FALSE |
1/1 |
0/5 |
|
TRUE |
5/0 |
3/3 |
|
The
5/0 entry says that A chooses to testify (testify? = TRUE) and B refuses
(testify? = FALSE), then A receives a 5 year prison reduction while B receives
no reduction.
Prisoner's
Dilemma is played each time a business deal is made. Shall A cheat B for a big
payoff or be honest for a moderate payoff? If both cheat, then the payoff is
minimal.