Game Theory Prisoner’s Dilemma

Prisoner B SilentPrisoner B Betrays Prisoner A Stays SilentEach Serve 6 monthsPrisoner A: 10 years Prisoner B: Goes Free Prisoner A BetraysPrisoner A: Goes Free Prisoner B: 10 years Each Serves Five Years

Learning Outcomes What is game theory trying to explain? a.Actors tend to act rationally in the sense that they want to maximise their benefits and minimise their costs. b.Each person always receives a higher pay-off by defecting hence betraying is the strictly dominant strategy. c.However, when both betray than they get a lower payoff than they would get by staying silent. d.Thus, seemingly rational self-interested action produce an irrational outcome (with each actor being worse off) and hence the dilemma.

Game Theory and International Relations Prisoner’s Dilemma manifested in the problem of two states pursuing an arms race. States act rationally by increasing their nuclear arsenal, safeguarding their national security as they are unsure of the other state. Both states are acting rationally but they produce an apparently irrational result as the world become unsafe and insecure in which an accidental nuclear war might break out.

Critique Laboratory experiment which work best in controlled environments but not in reality. Hypothesises game theory on only two-actor scenarios. What if more actors are included? Game theory then becomes more complex and difficult to comprehend.