The Prisoner’s Dilemma
- Both arrested during bank robbery.
- Kept in separate cells – NO COMMUNICATION.
- Offered separate deals if they confess and cooperate.
The Prisoner’s Dilemma
Erin
Confess
Don’t Confess
Confess
Each serves
10 years.
Shannon
Don’t
Confess
Shannon Serves
20 Years,
Erin Goes Free
Shannon Goes
Free,
Erin Serves 20
Years
Each Serves 1
Year
Payoff Matrix ↑
The Dominant Strategy: the strategy that is better for
one player, no matter what the other player does.
Erin
Confess
Don’t Confess
Confess
Each serves
10 years.
Shannon
Don’t
Confess
Shannon Serves
20 Years,
Erin Goes Free
Shannon Goes
Free,
Erin Serves 20
Years
Each Serves 1
Year
Payoff Matrix ↑
The Dominant Strategy: there is not always a dominant
strategy for both players, or for either player.
Erin’s Tutoring
Advertise
Don’t Advertise
Shannon’s
Tutoring
Advertise
$250, $200
$450, $300
Don’t
Advertise
$180, $500
$390, $400
Nash Equilibrium: the point where both players have made their best
choice, taking into consideration what the other player does.
Erin’s Tutoring
Advertise
Don’t Advertise
Shannon’s
Tutoring
Advertise
$250, $200
$450, $300
Don’t
Advertise
$180, $500
$390, $400
Nash Equilibrium: the point where both players have made their best
choice, taking into consideration what the other player does.
Erin’s Tutoring
Advertise
Don’t Advertise
Shannon’s
Tutoring
Advertise
$250, $200
$450, $300
Don’t
Advertise
$180, $500
$390, $400
Nash Equilibrium: the point where both players have made their best
choice, taking into consideration what the other player does.
Erin’s Tutoring
Advertise
Don’t Advertise
Shannon’s
Tutoring
Advertise
$250, $200
$450, $300
Don’t
Advertise
$180, $500
$390, $400