juniorGame Theory
What is the Prisoner’s Dilemma?
Updated May 16, 2026
Short answer
A game where two players acting rationally end up worse off than if they cooperated.
Deep explanation
Each prisoner chooses to cooperate or defect. Defection is individually rational but leads to worse collective outcomes. It illustrates conflict between individual rationality and collective welfare.
Real-world example
Used in advertising wars where companies spend heavily even when mutual restraint would be better.
Common mistakes
- Assuming cooperation naturally emerges without incentives.
Follow-up questions
- Why is defection dominant?
- How can cooperation be enforced?