No. 110 · People · Game Theory

Prisoner’s Dilemma

Choices that are sensible for each person can add up to a worse result for everyone.


The Prisoner's Dilemma shows how two people who would gain by cooperating are each tempted to betray the other, leaving both worse off. It began at RAND in 1950, where test players often cooperated anyway. MAN escaped an EU fine by revealing the truck makers’ price cartel.

When trust is low, change the game: communicate, make clear agreements, reward cooperation, and remember that repeated interactions make trust far more valuable.


In the Almanac

“A game at RAND”, 1950 · “The European truck cartel”, 1997–2016

Both stories in full, three ways to use it and where it misleads.

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Questions

What is Prisoner’s Dilemma?

The Prisoner's Dilemma shows how two people who would gain by cooperating are each tempted to betray the other, leaving both worse off. It began at RAND in 1950, where test players often cooperated anyway. MAN escaped an EU fine by revealing the truck makers’ price cartel.

How do you use Prisoner’s Dilemma?

When trust is low, change the game: communicate, make clear agreements, reward cooperation, and remember that repeated interactions make trust far more valuable.

When does Prisoner’s Dilemma matter?

Prisoner’s Dilemma is one of the 60 mental models for people, the situations where you ask: Why do people act as they do, and how do I work with them? Within that, it belongs to “Cooperation and trust”, alongside Cooperation, Free Rider Problem and Game Theory.

What is an example of Prisoner’s Dilemma?

Two stories show it at work: A game at RAND (1950) and The European truck cartel (1997–2016). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.

Which mental models are related to Prisoner’s Dilemma?

Tit for Tat, Nash Equilibrium and Perverse Incentives. Prisoner’s Dilemma itself comes from game theory.