The Prisoners Dilemma

1
The Prisoners Dilemma

• Two men are collectively charged with a crime and
  held in separate cells. They have no means of
  communicating with each other or making any kind
  of agreement. The two men are told the following
• If one of the confesses to the crime and the
  other does not, the confessor will be freed, and
  the other jailed for three years.
• If both confess to the crime, then each will be
  jailed for three years.
• Both prisoners know that if neither confesses,
  then they will each be jailed for one year.

2
The Prisoners Dilemma
D,C gti C,C gti D,D gti C,D
C,D gtj C,C gtj D,D gtj D,C
3
Axelrods Tournament

• ALL-D always defect
• RANDOM
• TIT-FOR-TAT first cooperate, then copy
  opponents behaviour
• TESTER first defect, on defect switch to
  TIT-FOR-TAT, otherwise twice cooperate, one
  defect
• JOSS TIT-FOR-TAT with 10 more defects

4
The Stag Hunt

• You and a friend decide it would be a great joke
  to show up on the last day of school with some
  ridiculous haircut. Egged on by your clique, you
  both swear youll get the haircut.
• A night of indecision follows. As you anticipate
  your parents and teachers reactions you start
  wondering if your friend is really going to go
  through with the plain.

5
The Stag Hunt

• Not that you do not want the plan to succeed the
  best possible outcome would be for both of you to
  get the haircut.
• The trouble is, it would be awful to be the only
  one to show up with the haircut. That would be
  the worst possible outcome.
• Youre not above enjoying your friends
  embarrassment. If you didnt get the haircut, but
  the friend did, and looked like a real jerk, that
  would be almost as good as if you both got the
  haircut.

6
The Stag Hunt
C,C gti D,C gti D,D gti D,C
7
The Game of Chicken
D,C gti C,C gti C,D gti D,D
8
Exercise 6.2
9
Exercise 6.2 (cont.)

• For each of the scenarios
• Informally analyze the scenarios
• Classify the preferences
• What strategies are strongly or weakly dominated
• Identify the Nash equilibria