HOW TO OUTMANEUVER THE PRISONER'S

DILEMMA?

WRITTEN BY

HAFSA JAHAN
HOW TO OUTMANEUVER THE PRISONER'S
DILEMMA?
 WRITTEN BY

HAFSA JAHAN
Before we get into prisoner’s
dilemma, let’s learn a little bit
about what game theory is all
about.

Game theory is the study of

mathematical models
concerned with the analysis
of strategies for dealing with
competitive situations in
which the outcome of one
participant's choice of action
is heavily dependent on the
actions of other participants.

 As human beings, we all have our own

motives, purpose and specific reasons to
make a choice. In most cases, before
making a particular decision, we often
think about whether the outcome will
benefit us or not. Game theory's position in
the mathematical narrative of social science
facilitates its foundation. In situations when
people or competitors in the same sector
make decisions that will affect one
another's interests, game theory makes it
possible to use universal mathematical
approaches for analysis.

 According to game theory, any social issue

may be turned into a game and then played
to determine the best potential resolution.

Even if it sounds selfish, we often tend to

take a rational decision making approach.

Additionally, we often make a choice

conforming to the circumstances or what
we believe is the best for us and
occasionally others.

At the end of the day, choosing what is best

for us becomes our ultimate goal and that is
exactly what we tend to keep in mind
before making a decision.

 Likewise, it is also important to note

that we often tend to respond the best
to other people's actions in a
completely individual and self-
interested way.

Game theory is regarded as the study

of strategy since it allows for at least
optimal autonomous decision-making
in a tactical context.

Due to the resolving of significant

problems in earlier economic
mathematical models, it has
revolutionized the field of economics.

 Game theory is significant and highly

relevant in all facets of decision-
making, it can be said. The foundation
of strategic observation and options
has benefited greatly from game
theory.

Prisoner's Dilemma is among the most

well-known applications of game
theory.

Despite the fact that an individual is

most likely to benefit from making a
decision that favors him or her, when
others are self-centered and will make
decisions that only benefit them as
individuals, it can lead to nothing less
than a disaster for the entire group.

 In situations of conflict involving at

least two players where a player's yield
will depend on other players, game
theory is typically employed to make
decisions.

Businesses frequently have to make a

number of strategic decisions that have
an impact on their capacity to realize
financial benefit, and game theory is
useful for simulating conflicting
actions of economic agents.

 Using game theory, real-world

scenarios can be drawn out and their
outcomes predicted. Each participant's
actions and decisions will have an
impact on the outcome. Furthermore,
it is expected that the players within
the game will attempt to maximize
their payoffs in the best way possible
and are being rational. In Prisoner’s
Dilemma, the two players making
decisions based on their own
individual interest still doesn’t lead to
the production of an optimal outcome.

Why?

Because the typical Prisoner’s dilemma

is designed in such a way that when a
rational individual acts selfish to
protect themselves, it would put the
other player at a disadvantage which
would eventually lead to severe
damages.

In this decision making process, two of

the players are separated and won’t be
able to communicate with each other.
 As a result, two players acting in their
own self- interest would still result in a
suboptimal choice leading to a worst
case scenario for both as a group in the
long run.

PRISONER’S DILEMMA EXAMPLE:

Taylor and Robert, two members of a

gang of bank robbers had been
arrested and eventually imprisoned.
Each prisoner is held in solitary
confinement and is unable to
communicate with or send messages to
the other.

 As a result, neither Robert nor Taylor

will be able to converse with one
another in any possible way during the
entire interrogation.

After a brief investigation, the police

realized that they found no witnesses
in the bank. Additionally, they also
understood the fact that they don’t
have enough evidence to prosecute the
pair on principal charge. As a result,
the authorities can only prove their
case if they can persuade at least one of
the bank robbers to betray his partner
and confess to the crime.

 It is very obvious that both Robert and

Taylor is just concerned with their own
personal well-being. At that situation,
they didn’t care about the well-being
of each other's accomplice and both of
them undeniably want to spend as little
time in prison as possible. Most likely,
they wouldn’t even want to go to the
prison. However, this won’t happen
since they have to face the
consequences for their action.

 Later on, the prosecutor offered them the

following proposal separately to Robert and
Taylor:

1) If both Robert and Taylor decides to

confess, they will each get 10 years in jail.

2) If Robert decides to confess and Taylor

remains silent, Robert will be allowed to go
free and Taylor who is the accomplice will
remain in prison for 30 years.

3) If Taylor decides to confess and Robert

remains silent, Taylor will be allowed to go
free and Robert who is the accomplice will
remain in prison for 30 years.

4) If both Robert and Taylor decide to remain

silent, both of the robbers will be jailed for 4
years in total (2 years for Robert and 2 years
for Taylor).

 Both Taylor and Robert is faced with the

choice to cooperate with their accomplice
and keep quiet or to defect from the gang and
testify for the prosecution.
From Taylor's point of view, if Robert remains
silent, then Taylor can co-operate with
Robert and go free. Obviously, he would be
better off betraying Robert. From Robert's
point of view, if Taylor remains silent, then
Robert can co-operate with Taylor and go
free. Obviously, he would be better off
betraying Taylor. Taylor will be better off if
he defected and gave a testimony in either
scenario, whether he worked with Robert or
not. Robert will always be better off defecting
because he has the same set of options as
Taylor.

The paradox of the prisoner's dilemma is that

Taylor and Robert can both reduce the total
amount of time they spend in jail by
cooperating and keeping quiet (4 years in
total).

However, since we already learned about the

fact that both Taylor and Robert would most
likely want to take consideration of the fact
that whether the consequences of their
decision will affect them negatively or not.

That's why we have to look back at the fourth

option that we have already pointed out
before.

It is the least amount of time (4 years) that

they would've had to spend in the prison.
However, in order to do that, both of them
will only have to remain silent.

Both of the robbers will be taking a decision

which is most likely going to favor them
individually.

They will become self-centered and will take

decisions that will only benefit them as
individuals which would eventually lead to
nothing less than a disaster for the duo.

The incentives that they each face separately

will always drive them each to defect and end
up doing the maximum total jail time
between the two of them of 60 years in total
(30 years for Robert and 30 years for Taylor)
which have already pointed out in the 2nd
and 3rd point.

The Prisoner's Dilemma serves as an effective

tool for strategic decision-making because it
provides a framework for examining how to
balance cooperation and competition.

The repetition of the game allows for the

development of strategies that deviate from
the normal logic of an isolated round.

What happens, for instance, if the game is

repeated?

The iterated prisoner's dilemma is an

extension of the general form, with the
exception that the same players play it
endlessly.

The fact that repetition is a quick way to pick

up a skill or a language makes it important
from a pedagogical perspective.

If we do pay close attention, we will see that

the majority of human and other economic
transactions involve repetition.

In the case of Taylor and Robert, for instance,

the goal is to maximize the point total until
the game is over if the game is played
repeatedly for a number of rounds until it is
finished (as if you are being questioned for
various crimes continuously).

 Consider a scenario in which each prisoner

has three options in their game: cooperate,
betray, or cooperate if and only if the other
player cooperates. With this third option
available to them, Taylor and Robert are no
longer destined to function as "rational
betrayers" who end up having less usefulness
than if they had worked together.

Robert and Taylor both reduce their chances

of being betrayed by the other party while
keeping the advantages of cooperation by
agreeing to work together on a conditional
basis.

 Players can select strategies in an iterated

prisoner's dilemma that favor cooperation or
penalize defection over time.

We can even consciously transition from a

once-experienced prisoner's dilemma to a
recurrent prisoner's dilemma by constantly
interacting with the same people, in this case
Robert and Taylor.

A prisoner's dilemma is likely to result in

both Robert and Taylor defecting, which
would have unfavorable consequences for
both of them. Let's review the main points of
Nash equilibrium now.

 All game theory models only work if the

participants are "rational agents," or if they
have clear objectives, act to choose the optimal
course of action, take uncertainty into account
when making decisions, and have access to
actual options.

Although there are rational models, there are

also various models, and this necessitates
different processes depending on the models
that are utilized in the decision-making
models.

The Nash equilibrium, a decision-making

theorem in game theory, states that a player
can achieve the desired result by adhering to
their initial strategy.

 It conceptualizes player behavior and

interactions to predict the best outcomes. In a
Nash equilibrium, each player is assumed to be
aware of the equilibrium plans of the other
players, therefore altering one's own strategy
will not be advantageous to anyone.

When two inmates, Robert and Taylor, are

apprehended, they are each offered the choice
of confessing or lying. This is known as a
prisoners' dilemma.

As we've already learned, a prisoner's

punishment will be reduced if he confesses and
provides information on the other.

The other will receive a longer sentence,

though, if one of them confesses and discloses.
They will each receive a lengthy term if they
both confess and inform.

So, lying and not confessing is the wisest

course of action for both of them. The Nash
equilibrium now shows that the strategy chosen
by each player is the most optimal one in light
of the choices made by the other players.

Due of the extreme self-centeredness of both

parties, both of the prisoners will eventually
confess and receive a lengthy term. This result
is known as the Nash Equilibrium, which
denotes that the solution is stable because no
player has a reason to diverge but is not the
best option for them.

As a result of what the other players are doing,

no player is motivated to alter their approach in
this situation. Neither Taylor nor Robert can
rely on the other not to tell a lie or to succumb
to the pressure of confessing to lighten their
own sentence.

It is also feasible to predict what other players

will do when they are all making decisions at
once and one individual takes into account the
choices made by the other players.

Even if it may appear like the ideal alternative

for making judgments, a logical decision-
making paradigm has drawbacks. Everyone
benefits if they get the outcome they seek.

Cooperation leads to a better outcome for both

players; however, if Robert chooses mutual
cooperation and Taylor does not, Robert's
outcome is worse.

The relationship between the prisoners will

come to an end if they are both aware that they
will probably interact with one another in the
future but are unaware of this fact. However,
because collaboration yields superior results to
defection, a favorable outcome may also occur.

The choice to cooperate from an individual

perspective is irrational, hence the outcome
could not be rational. According to economic
theory, every buyer will choose a product or
service that will maximize their utility.

 It might look as though Taylor and Robert will

start to work together if we run the scenario
again.

In terms of game theory, however, this is

absurd. Both players have an incentive to make
accusations during the final round when they
know how many times the game will be played
because there can be no reprisals.

When someone attacks them and causes them

unjustifiable loss or harm, either individually or
collectively, people will seek retribution.

 Both have an incentive to accuse on the

penultimate round since they know the other
would undoubtedly do so on the final round—
and so on, returning to the beginning.
Retaliation is a highly destructive way to vent
feelings that negatively affects the prisoner’s
mental and physical health. Initial joy and
satisfaction from the victim's agony may be
evoked. The prisoner's dilemma is a well-
known allegory for the challenge of resolving
issues involving collective action. Naturally,
there are situations in which it is morally
acceptable to enrich oneself at the expense of
others, but in the prisoner's dilemma game,
both players would prefer the outcome if they
made selfless decisions as opposed to selfish
ones.

The figurative inmates suffer a

heavier punishment as a result of
acting selfishly than they would
have if they had cooperated. It is
possible for a player to use its
current move to reward or penalize
the other player's play in earlier
moves in order to encourage
cooperative play in the future when
the prisoner's dilemma game is
played repeatedly. The players
could create incentives for
collaboration, though, if the
experiment were repeated over an
extended period of time.