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The Prisoner's Dilemma

ROBERT V. DODGE

in Schelling's Game Theory: How to Make Decisions

This chapter focuses on the best-known game in game theory, the prisoner's dilemma. It begins with the development of the game at the RAND Corporation. Classical economics is based on the idea that ... More

This chapter focuses on the best-known game in game theory, the prisoner's dilemma. It begins with the development of the game at the RAND Corporation. Classical economics is based on the idea that the greatest good is achieved by pursuing individual self-interest and this simple two-by-two game demonstrates that the “rational” choice could be to behave in a seemingly non-rational way; that the superior outcome could be achieved through cooperation. The standard story developed by Albert Tucker that gave the game the name “prisoner's dilemma” is described. The basic prisoner's dilemma matrix is presented and the ranking of utility payoffs is listed along with the names for the payoffs used by Sugden and many others: the “trust” payoff, the “nasty” payoff, the “sucker” payoff. Examples of the prisoner's dilemmas from everyday life and international relations are given, as is Schelling's struggle against the prisoner's dilemma of the Cold War arms race, where he worked to achieve gains in arms control. The final part of the chapter mentions references to the prisoner's dilemma in recent journalism from around the world, showing its wide acceptance as a term for situations in which individual self interest harms group benefit.Less

Measuring Social Norms and Preferences Using Experimental Games: A Guide for Social Scientist s

Colin F. Camerer and Ernst Fehr

in Foundations of Human Sociality: Economic Experiments and Ethnographic Evidence from Fifteen Small-Scale Societies

The work of the cross‐cultural behavioural experiments project presented in this book is rooted in the logic of game theory and the practices of experimental economics, and this chapter provides an ... More

The work of the cross‐cultural behavioural experiments project presented in this book is rooted in the logic of game theory and the practices of experimental economics, and this chapter provides an introduction to the fundamentals of behavioural game theory, and the procedures and conventions of experimental economics. It starts by defining the main social preference terms used – self‐interest, altruism, reciprocity, inequity aversion, and then sketches game theory in broad terms and describes some basic features of experimental design in economics. Seven games that have proved useful in examining social preferences are introduced; these are the Prisoner's Dilemma Game, the Public Goods Game, the Ultimatum Game, the Dictator Game, the Trust Game, the Gift Exchange Game, and the Third‐Party Punishment Game). The games are defined formally, indicating the aspects of social life that they express, and describing behavioural regularities found in experimental studies; these behavioural regularities are then interpreted in terms of preferences for reciprocity, inequity aversion, or altruism. The final sections of the chapter describe some other games anthropologists might find useful, and draw conclusions.Less

Getting Locked In

Ken Binmore

in Playing for Real Coursepack Edition: A Text on Game Theory

This introductory chapter describes the Prisoner’s Dilemma to show how game theory can help analyze different strategic problems. It explains how game theory works in a rational world where logic and ... More

This introductory chapter describes the Prisoner’s Dilemma to show how game theory can help analyze different strategic problems. It explains how game theory works in a rational world where logic and reasoning are employed in making strategies and in taking decisions. Game theory has been used in interactions among people, as well among insects and plants. In the Prisoner’s Dilemma game, trade-offs are offered to two prisoners for their confession or non-confession to a crime they are accused off. The purpose of this game is the analysis of what strategies the prisoners should take and what the payoffs are in relation to their choices. According to game theorists, the Prisoner’s Dilemma embodies the essence of the problem of human cooperation. It represents a situation in which the dice is loaded against cooperation. When this is understood against real life dilemmas, problems, and predicaments humans have encountered, it shows how mankind has evolved into social animals.Less

Network Awareness in Agent-based Models

Akira Namatame and Shu-Heng Chen

in Agent-Based Modeling and Network Dynamics

Chapter 2 reviews the development of the network-based agent-based models. From the behavioral and decision-making perspective of agents, the network-based agent-based model is accompanied by the ... More

Chapter 2 reviews the development of the network-based agent-based models. From the behavioral and decision-making perspective of agents, the network-based agent-based model is accompanied by the neighborhood-based decision rules. The chapter divides the literature into two parts. The one developed before the advent of modern network science normally relies on the one-dimensional or two-dimensional lattices (cellular automata). The one developed with the advent of modern network science relies on the newly proposed network generation algorithms. In a chronological order, the chapter demonstrates the two-generation network-based agent-based models via a number of pioneering works. The purpose of these demonstrations is to show how network topologies can affect the operation of various economic and social systems, including residential segregation, pro-social behavior, oligopolistic competition, market sentiment, sharing of public resources, market mechanism, marketing, and macroeconomic stability. Cellular automata as the theoretical underpinning of undecidability and unpredictability for the dynamics on networks are also introduced.Less

Revisiting the Collective Action Dilemma

in Breakdown in Pakistan: How Aid Is Eroding Institutions for Collective Action

This chapter addresses the concept of a collective action situation, which can be described as an event that occurs when a needed collective result requires the contribution of a number of people. It ... More

This chapter addresses the concept of a collective action situation, which can be described as an event that occurs when a needed collective result requires the contribution of a number of people. It stresses that every productive relationship has some type of collective action. It discusses two works that had a great influence in disposing international donors towards providing aid to people believed to strengthen civic culture: Putnam and Tocqueville. Next, it discusses the debate on collective action, as illustrated in the prisoner's dilemma game and the tragedy of the commons. Finally it presents two different adjustments that must be made in order to create a theory that can explain the negative impact of the available patterns of aid disbursement on other-regarding and self-regarding groups and explains the methods used to study the present topic.Less