The Prisoner’s Dilemma presents this scenario: Two suspects have been accused of a crime and they are now in separate rooms in a police station, with no communication possible with the other. The prosecutor has separately told them the following:
- If you confess and agree to testify against the other suspect, who does not confess, the punishment against you will be dropped and you will be free.
- If you do not confess but the other suspect does, you will be convicted and the the prosecution will seek the maximum sentence of three years.
- If both of you confess you will both be sentenced to five years in prison.
- If neither of you confesses you will both be accused and you will be sentenced to two years in prison.
What should the suspects do?
The prisoner’s dilemma provides a framework for understanding how to strike a balance between cooperation and competition and is a useful tool for strategic decision-making.
For example, in the real world, if two companies have an implicit agreement to keep the same salaries ranges in a given year, their costs may stay at relatively same levels. But if one defects and raises its budget, it may attract better employees than the other company. However, if both companies boost their budgets, they can attract similar profiles, but neither will be more efficient than the other.
Or, think about a working task which has to be split between 2 employees. The best situation is when both of them are equally involved. If one of them doesn't involve, for sure he will save time and effort. But the other one will double his effort. If no one involves, they both loose.
Unfortunately, if we know that we have to cooperate, we will easily feel better when the other looses. It will help us to be aware of every moment that we cannot have success without the team's success. For the team's success, we have to communicate and collaborate properly.