Prisoner's dilemma - Revision history

Wayne: the cited webpage has moved

2020-10-18T01:14:59Z

the cited webpage has moved

Maja: /* Reference */

2012-06-18T14:43:42Z

‎Reference

Maja: /* Reference */

2012-06-18T14:43:32Z

‎Reference

Maja: /* Reference */

2012-06-18T14:43:23Z

‎Reference

Maja at 14:43, 18 June 2012

2012-06-18T14:43:01Z

Maja: /* Game theory in games */

2012-06-18T14:38:40Z

‎Game theory in games

Maja: /* Game theory in games */

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‎Game theory in games

Maja: /* Prisoner’s dilemma in Eurozone */

2012-06-18T14:36:41Z

‎Prisoner’s dilemma in Eurozone

Maja: /* Other conditions */

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‎Other conditions

Maja: /* Game balance */

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‎Game balance

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 . WAYNE, Davis. PRISONER’S DILEMMA [online]. March 22nd, 2007 [cit. 2012-04-10].
-Available from: http://www.iterated-prisoners-dilemma.net/
+Available from: http://www.iterated-prisoners-dilemma.info/
 =References=
@@ Line 231: / Line 231: @@
 . http://shporiforall.ru/shpory/ek-teorii/2-dilemma-zaklyuchennogo-matrica-vyigrysha-ravnovesie-nesha-dominiruyushhaya-strategiya.html
-. http://www.iterated-prisoners-dilemma.net/
+. http://www.iterated-prisoners-dilemma.info/
 . http://plato.stanford.edu/entries/prisoner-dilemma/

@@ Line 205: / Line 205: @@
 Available from: http://www.iterated-prisoners-dilemma.net/
-=Reference=
+=References=
 . http://plato.stanford.edu/entries/game-theory/

← Older revision		Revision as of 14:43, 18 June 2012
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	5. http://www.rand.org/pubs/authors/d/dresher_melvin.html		5. http://www.rand.org/pubs/authors/d/dresher_melvin.html
−

	6. http://www.rand.org/about.html		6. http://www.rand.org/about.html

@@ Line 208: / Line 208: @@
 . http://plato.stanford.edu/entries/game-theory/
 . http://plato.stanford.edu/entries/game-theory/#Games
 . http://plato.stanford.edu/entries/game-theory/#Util
 . http://www.informs.org/About-INFORMS/History-and-Traditions/Miser-Harris-Presidential-Portrait-Gallery/Merrill-M.-Flood
 . http://www.rand.org/pubs/authors/d/dresher_melvin.html
 . http://www.rand.org/about.html
 . http://www.nytimes.com/1995/01/27/obituaries/albert-w-tucker-89-pioneering-mathematician.html
 . http://www-cs-faculty.stanford.edu/~eroberts/courses/soco/projects/1998-99/game-theory/nonzero.html
 . http://www.press.umich.edu/titleDetailLookInside.do?id=20269
 . http://www.apn.ru/publications/article19740.htm
 . http://tuvalu.santafe.edu/~jkchoi/game4.pdf
 . http://shporiforall.ru/shpory/ek-teorii/2-dilemma-zaklyuchennogo-matrica-vyigrysha-ravnovesie-nesha-dominiruyushhaya-strategiya.html
 . http://www.iterated-prisoners-dilemma.net/
 . http://plato.stanford.edu/entries/prisoner-dilemma/
 . http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.176.6993
 . http://bizkiev.com/content/view/822/205/
 . http://www.goldenballstvshow.com/
 . http://serendip.brynmawr.edu/bb/pd.html

← Older revision		Revision as of 14:43, 18 June 2012
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	11. WAYNE, Davis. PRISONER’S DILEMMA [online]. March 22nd, 2007 [cit. 2012-04-10].		11. WAYNE, Davis. PRISONER’S DILEMMA [online]. March 22nd, 2007 [cit. 2012-04-10].
	Available from: http://www.iterated-prisoners-dilemma.net/		Available from: http://www.iterated-prisoners-dilemma.net/
		+
		+	=Reference=
		+
		+	1. http://plato.stanford.edu/entries/game-theory/
		+	2. http://plato.stanford.edu/entries/game-theory/#Games
		+	3. http://plato.stanford.edu/entries/game-theory/#Util
		+	4. http://www.informs.org/About-INFORMS/History-and-Traditions/Miser-Harris-Presidential-Portrait-Gallery/Merrill-M.-Flood
		+	5. http://www.rand.org/pubs/authors/d/dresher_melvin.html
		+	6. http://www.rand.org/about.html
		+	7. http://www.nytimes.com/1995/01/27/obituaries/albert-w-tucker-89-pioneering-mathematician.html
		+	8. http://www-cs-faculty.stanford.edu/~eroberts/courses/soco/projects/1998-99/game-theory/nonzero.html
		+	9. http://www.press.umich.edu/titleDetailLookInside.do?id=20269
		+	10. http://www.apn.ru/publications/article19740.htm
		+	11. http://tuvalu.santafe.edu/~jkchoi/game4.pdf
		+	12. http://shporiforall.ru/shpory/ek-teorii/2-dilemma-zaklyuchennogo-matrica-vyigrysha-ravnovesie-nesha-dominiruyushhaya-strategiya.html
		+	13. http://www.iterated-prisoners-dilemma.net/
		+	14. http://plato.stanford.edu/entries/prisoner-dilemma/
		+	15. http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.176.6993
		+	16. http://bizkiev.com/content/view/822/205/
		+	17. http://www.goldenballstvshow.com/
		+	18. http://serendip.brynmawr.edu/bb/pd.html
		+
		+	=Additional files=
		+
		+	[[media:Prisoner_dilemma_eng.pdf‎\|Prisoner's Dilemma chapter]]

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 Finally, more interactive example of prisoner’s dilemma in real life is a British game show '''[http://www.goldenballstvshow.com/ “Golden Balls”]'''. You can can check it out on YouTube, but let us take a look at the rules. There are two players, who play a game very similar to out prisoner’s dilemma and the prize is 100,000 pounds. Each of the players can choose either to split or steal. If both players split, then each one gets 50,000 pounds. If one player splits and the other steals, the person who split gets 100,000 and the other person gets 0. And finally, if both of them steal, then they both get 0. But the main difference is that before they start making their decisions, playes can talk for a few minutes and presumably convince the other person that they plan to split. Try to watch couple of episodes of this game and understand, what will be the best strategy to win. Then imagine that you play with a total stranger and then with someone you know. And then that you play one time or there are more games in one set [http://gametheoryinpractice.blogspot.com/2009/08/split-or-steal.html].
-You can also try out an online version of this model – '''[http://serendip.brynmawr.edu/bb/pd.html to better understand the whole concept Serendip’s Exchange: You Have Found The Prisoners’ Dilemma]'''.
+You can also try out an online version of this model to better understand the whole concept '''[http://serendip.brynmawr.edu/bb/pd.html Serendip’s Exchange: You Have Found The Prisoners’ Dilemma]'''.
 Hopefully, the problematic of this model is now more clear to you and you can use it not only in theory, but also to solve real problems and tasks. Good luck!

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 Current situation with investors who run away from Greece illustrates the dilemma very well. In economic theory this is called a “coordination trap” or [http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.176.6993 inefficient stable equilibrium]. It is the same balance as in our dilemma the silence and cooperation among the prisoners.
-Exactly the same happenes in the eurozone. The tragedy of the situation in which Greece has a huge burden of debt in the absence of adequate tax revenues due to economic crisis, makes the market “pledge to each other”. Noone believes in a “happy-end” and if you are too slow to react and lay someone down, then you will be layed down yourself. Default seems imminent, and investors want to get rid of the Greek bonds, while their price has not dropped completely, or, even worse, they all turned out to be worthless. Naturally, the new loan that Greece needs so desperately, can be forgetten.
+Exactly the same happenes in the eurozone. The tragedy of the situation in which Greece has a huge burden of debt in the absence of adequate tax revenues due to economic crisis, makes the market ''“pledge to each other”''. Noone believes in a ''“happy-end”'' and if you are too slow to react and lay someone down, then you will be layed down yourself. Default seems imminent, and investors want to get rid of the Greek bonds, while their price has not dropped completely, or, even worse, they all turned out to be worthless. Naturally, the new loan that Greece needs so desperately, can be forgetten.
 The darkest result of all this might be the country default and rapid erosion of capital in European banks. This will lead to ceasing of lending and the subsequent closing of credit lines in U.S. banks. It will all be accompanied by a collapse in energy prices and the actual stopping of the world economy, as it happened in 2008.

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 Not let us draw out attention to the boundary condition of the prisoner’s dilemma, namely the prison walls, the bars on the windows and a doors with a peepholes. All this indicates, that a person is in trouble already and even if he stands before the choice, the only thing he can do is to continue to lose. The only thing that remains to him is to minimize the inevitable losses.
-The strategy of “testifying” strictly dominates over the strategy of “silence”. Similarly, another prisoner will come to the same conclusion. It is evident, that common interest of both prisoners is to work together, to keep silent and get only half of the year in jail. But prisoners are not able to cooperate in taking decisions. In other words, they do not have the opportunity to jointly implement their common interest. So each one of them begins to assert his personal interest, which does not lead to the best result.
+The strategy of '''“testifying” '''strictly dominates over the strategy of '''“silence”'''. Similarly, another prisoner will come to the same conclusion. It is evident, that common interest of both prisoners is to work together, to keep silent and get only half of the year in jail. But prisoners are not able to cooperate in taking decisions. In other words, they do not have the opportunity to jointly implement their common interest. So each one of them begins to assert his personal interest, which does not lead to the best result.
-But imagine that prisoners have the opportunity to discuss this situation. About what would they want to negotiate? Of course about common silence; as we see from the picture – it is the most painless variant for both of them as a group. However, each prisoner, after making sure that the other is convinced of the necessity and reasonableness of making a confession, will not confess himself, because he wants to be released. The fact that each of the prisoners, realizing how coordination of their tactics is mutually beneficial, will be in a better position while playing for himself. In that case he will be released.
+But imagine that prisoners have the opportunity to discuss this situation. About what would they want to negotiate? Of course about common silence; as we see from the scheme above – it is the most painless variant for both of them as a group. However, each prisoner, after making sure that the other is convinced of the necessity and reasonableness of making a confession, will not confess himself, because he wants to be released. The fact that each of the prisoners, realizing how coordination of their tactics is mutually beneficial, will be in a better position while playing for himself. In that case he will be released.
 As the analysis of options shows, the prisoners can not cooperate, because each of them has a personal interest. It is assumed that in this dilemma each of the prisoners acts according to the number of years he will be held in prison. But let’s imagine that our criminals are not selfish but altruistic, and each one also takes others’ interests into consideration. Then confession of the crime is the neccesary dominant strategy.

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 Each prisoner can accurately predict his win in each of the four situations. As you know, the balance of the game in game theory is '''[http://en.wikipedia.org/wiki/Nash_equilibrium Nash equilibrium]'''. The prisoner’s dilemma is a game with a special kind of Nash equilibrium – '''[http://tuvalu.santafe.edu/~jkchoi/game4.pdf dominant strategy equilibrium]'''. But before we get to the dominant strategy equilibrium, let’s briefly review what is a normal Nash equilibrium.
-'''NASH EQUILIBRIUM''' is the type of game solution of two or more players, in which neither party can increase their gain by changing his decision unilaterally while other members do not change their decisions. Accordingly, such a set of strategies chosen by participants and their winnings is called a Nash equilibrium. In other words, everything depends not only on you. [http://shporiforall.ru/shpory/ek-teorii/2-dilemma-zaklyuchennogo-matrica-vyigrysha-ravnovesie-nesha-dominiruyushhaya-strategiya.html]
+'''NASH EQUILIBRIUM''' is the type of game solution of 2 or more players, in which neither party can increase their gain by changing his decision unilaterally while other members do not change their decisions. Accordingly, such a set of strategies chosen by participants and their winnings is called a Nash equilibrium. In other words, everything depends not only on you. [http://shporiforall.ru/shpory/ek-teorii/2-dilemma-zaklyuchennogo-matrica-vyigrysha-ravnovesie-nesha-dominiruyushhaya-strategiya.html]
-But let us return to our problem. So, we still have two prisoners, sitting in two different cells without the possibility to agree on what to do next. And there are four possible variants of the outcome.
+But let us return to our problem. So, we still have 2 prisoners, sitting in 2 different cells without the possibility to agree on what to do next. And there are 4 possible variants of the outcome.
 Remember, you had put yourself in the shoes of one of them? Let us repeat the experience, and thinking only rationally, try to make a decision. If we are afraid, we are more likely to think only about ourselves. Fear switches on instinct of self-preservation which is often stronger than moral standards and obligations.