The Prisoners Dilemma in Game Theory
The prisoner’s dilemma is a canonical example of a game analysed in Game Theory that shows why two purely “rational” individuals might not cooperate, even if it appears that it is in their best interest to do so. Game Theory is the study of strategic decision making. Specifically it is the study of mathematical models of conflict and cooperation between intelligent rational decision makers. It can also be known as interactive decision theory.
Now Game Theory can be applied to many different scenarios whether it be in real life, a sporting event or in casino games, you can use certain mathematical equations to find the likely hood of probably outcomes. Let us take a look at the Prisoners Dilemma as an example:
The 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 prosecutors do not have enough evidence to convict the pair on the principal charge. They hope to get both sentenced to a year in prison on a lesser charge. Simultaneously, the prosecutors offer each prisoner a bargain. Each prisoner is given the opportunity either to: betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent. Here is the offer:
- If A and B each betray the other, each of them serves 2 years in prison
- If A betrays B but B remains silent, A will be set free and B will serve 3 years in prison (and vice versa)
- If A and B both remain silent, both of them will only serve 1 year in prison (on the lesser charge)
Now given this information how do you know which way to turn? Even in the most trivial situations uncertainty is rampant and getting it wrong can have negative impacts on your wallet or social life. Every decision has risks and rewards, probabilities and payoffs.
Unibet casino have created an informative interactive guide to help you get a better understanding of Game Theory. There are two interactive games for you to test your decision making which will also provide you with explanation to make sure you make better decisions in the future. You can also find more information on the problem above and figure out if you should cooperate or not.