Скачать или смотреть What is Prisoners Dilemma? Game theory explained by IIT IIM grad Bhishm Tahiliani

The Prisoner's Dilemma is a classic problem in game theory that demonstrates why two individuals might not cooperate, even when it is in their best interest to do so. It is often used to explain decision-making in economics, politics, and social sciences.

Scenario:
Two criminals are arrested and interrogated separately. They have two options: Cooperate (stay silent) or Defect (betray the other). The possible outcomes are:

Both Cooperate → Each serves 1 year in prison.

One Defects, One Cooperates → The defector goes free, while the cooperator gets 3 years in prison.

Both Defect → Each serves 2 years in prison.

Prisoner A / Prisoner B Cooperate Defect
Cooperate 1 year / 1 year 3 years / Free
Defect Free / 3 years 2 years / 2 years
Dilemma:
Individually, defecting seems rational because it offers the chance to go free. But if both defect, they end up worse off (2 years each) than if they had cooperated (1 year each).

This illustrates how rational self-interest can lead to worse outcomes for everyone, which is why the Prisoner's Dilemma is a key concept in understanding competition vs. cooperation.

#mba #economics