Describe the prisoners' dilemma game and explain why the Nash equilibrium delivers a bad outcome for both players

Question

What will be an ideal response?

Answer 1

In the prisoners' dilemma game, each prisoner faces two strategies: confess or deny. There are four outcomes: i) Both prisoners confess and each receives more years in prison than if they both did not confess, ii) both prisoners deny, iii) prisoner A confesses and prisoner B denies, and iv) prisoner B confesses and prisoner A denies. In these last two outcomes, the confessing prisoner gets a lower sentence than if both confessed and lower than if they both denied. The dominant strategy for both prisoners is to confess. Regardless of what the other prisoner does, the best strategy for each prisoner is to confess, and both prisoners confess. This outcome is worse for both prisoners than if they each denied the crime, which creates the dilemma.