Prisoner's dilemma

(noun)

A game that shows why two individuals might not cooperate, even if it appears that it is in their best interests to do so.

Related Terms

  • Nash equilibrium
  • game theory

Examples of Prisoner's dilemma in the following topics:

  • The Prisoner's Dilemma and Oligopoly

    • The prisoner's dilemma shows why two individuals might not cooperate, even if it is collectively in their best interest to do so.
    • The prisoner's dilemma is a canonical example of a game analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interest to do so.
    • Similarly to the prisoner's dilemma scenario, cooperation is difficult to maintain in an oligopoly because cooperation is not in the best interest of the individual players.
    • One traditional example of game theory and the prisoner's dilemma in practice involves soft drinks.
    • Analyze the prisoner's dilemma using the concepts of strategic dominance, Pareto optimality, and Nash equilibria
  • Game Theory Applications to Oligopoly

    • The prisoner's dilemma is a specific type of game in game theory that illustrates why cooperation may be difficult to maintain for oligopolists even when it is mutually beneficial.
    • In a prisoner's dilemma game, the dominant strategy for each player is to betray the other, even though cooperation would have led to a better collective outcome.
  • Cartel Example

    • Game theory suggests that cartels are inherently unstable, because the behavior of cartel members represents a prisoner's dilemma.
  • Principle-Agent Problem

    • The principle-agent problem (agency dilemma) exists when conflicts of interest arise between a principal and an agent in a business setting.
    • In economics, the principal-agent problem (also known as an agency dilemma) exists when conflicts of interest arise between a principal and an agent in a business setting .
  • Externalities in the Health Care Market

    • Antibiotic Resistance: An interesting byproduct of the newer solutions to medical dilemmas is the slowly growing resistance of antibiotics in bacteria.
  • Fiscal Policy and Economic Stabilization

    • This posed an acute dilemma for policy-makers.
    • President Jimmy Carter (1973-1977) sought to resolve the dilemma with a two-pronged strategy.
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