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873 bytes added ,  20:39, May 5, 2007
Rewrite of the main part. I think it's a bit easier to understand this way.
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The Prisoner's Dilemma is a classic problem in [[Game Theory]]. It seems paradoxical, in that the [[Nash equilibrium]] is not the best solution for both players.
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The '''Prisoner's Dilemma''' is a classic problem in [[Game Theory]]. It has the paradoxial outcome that members of a group will consciously steer towards a sub-optimal outcome in certain scenarios.
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The game is usually phrased in terms of two suspects, both of whom have been arrested, and offered a bargain. If neither of them confess, they will both serve 6 months in prison for a minor crime. If one of them confesses, this provides evidence of a major crime. The confessor is rewarded by being let off, and the other suspect serves ten years in prison. If both confess, they both serve two years.
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<div style=float:right; padding: 20px">
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{|style="border-collapse:collapse"
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|
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|
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!colspan=2 style="padding:10px"|''B''
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|-
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|
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|
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|style="border-style:solid; border-width:1px; padding:10px"|don't confess
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|style="border-style:solid; border-width:1px; padding:10px"|confess
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|-
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!rowspan=2 style="padding:10px"|''A''
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|style="border-style:solid; border-width:1px; padding:10px"|don't confess
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|style="border-style:solid; border-width:1px; padding:10px"|A: 6 months
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B: 6 months
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|style="border-style:solid; border-width:1px; padding:10px"|A: 10 years
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B: free
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|-
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|style="border-style:solid; border-width:1px; padding:10px"|confess
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|style="border-style:solid; border-width:1px; padding:10px"|A: free
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B: 10 years
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|style="border-style:solid; border-width:1px; padding:10px"|A: 2 years
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B: 2 years
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|}
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</div>
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If each prisoner only cares about their own jail term, then the best choice for each prisoner would be to confess. Confession is what is known as a [[Strictly Dominant Strategy]], as whatever one suspect chooses to do, Confess is the best choice. If Prisoner B confesses, then Prisoner A's best response is to confess, to avoid the ten year prison term. If Prisoner B does not confess, then Prisoner A's best response is still to confess, to get the reward of not going to prison.
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The game is usually phrased in terms of two suspects, both of whom have been arrested, and offered a bargain. If both stay silent, they will both serve 6 months in prison for a minor crime. If one of them confesses, this provides evidence of a major crime. The confessor is rewarded by being let off, and the other suspect will serve ten years in prison. If both confess, they will both serve two years.
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Thus, the situation leads to both prisoners confessing, and serving a two year prison term. However, this is worse for both prisoners than if they both kept quiet, and served only six months. The prisoners would benefit if they could co-operate, but in the usual phrasing of the problem, neither player knows what the other will do. The situation with both prisoners confessing is a Nash equilibrium, and is in fact the only such equilibrium that exists in the problem.
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It is obvious that the best outcome (the [[Pareto optimum]]) for the group would be if both prisoners cooperated and stayed silent: Six months for both prisoners. However, in the "default" setting of the Prisoner's dilemma, we assume that the prisoners are not given the chance to work out such a strategy and that they are interested in their own wellbeing first.
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Prisoner A will now analyze his options:
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*If Prisoner B chooses "don't confess", Prisoner A's best choice will be "confess": A gets out of prison immediately.
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*If Prisoner B chooses "confess", Prisoner A's best choice will be "confess", too: 2 years is better than 10 years.
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(The case for Prisoner B is symmetric.)
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Using this reasoning, both prisoners will choose "confess", even though it is not best result.
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The strategy "confess" is a strictly [[dominant strategy]]: The choice of the Prisoner B does not change the way Prisoner A will act. The "confess/confess" scenario is also the only [[Nash equilibrium]] in this problem.
    
==Iterated Prisoner's Dilemma==
 
==Iterated Prisoner's Dilemma==
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