Game Theory 101: The Prisoner's Dilemma
Learning about it from the UK TV game show "Golden Balls"
The Prisoner’s Dilemma is the most famous game in game theory. I provide a video lesson, but here is a good explanation from Wikipedia:
William Poundstone described this "typical contemporary version" of the game in his 1993 book Prisoner's Dilemma:
Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don't have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain. If he testifies against his partner, he will go free while the partner will get three years in prison on the main charge. Oh, yes, there is a catch ... If both prisoners testify against each other, both will be sentenced to two years in jail. The prisoners are given a little time to think this over, but in no case may either learn what the other has decided until he has irrevocably made his decision. Each is informed that the other prisoner is being offered the very same deal. Each prisoner is concerned only with his own welfare—with minimizing his own prison sentence.[2]
In a typical prisoner’s dilemma game, each prisoner has an incentive to confess and testify against the other individual. This is despite the fact that collectively, both would be better off by staying quiet.
Therefore, we an outcome that isn’t efficient given there is a better payoff for both players (prisoners).
I explore a similar prisoner’s dilemma game in this video, and we watch an interesting clip from the TV Golden Balls - a UK TV game show - where the players are in a prisoner’s dilemma situation. Check it out at the video below!