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The prisoner’s dilemma, with its single non-cooperative equilibrium, represents a worst-case game. But the scenario models a common trading scenario. Nonetheless, we manage to trade, and find it in our self-interest to do so.
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The prisoner’s dilemma is a common situation analyzed in game theory that can employ the Nash equilibrium. In this game, two criminals are arrested and each is held in solitary confinement...
The prisoner's dilemma is a game theory thought experiment involving two rational agents, each of whom can either cooperate for mutual benefit or betray their partner ("defect") for individual gain. The dilemma arises from the fact that while defecting is rational for each agent, cooperation yields a higher payoff for each.
A Nash equilibrium occurs when no player has an incentive to change their decision, taking into account what the players have decided and assuming the other players don’t change their decisions. Thus, all players have made an optimal decision, given the decisions of the other players.
This is also the Nash Equilibrium, a decision-making theorem within game theory that states a player can achieve the desired outcome by not deviating from their initial strategy. The Nash ...
The prisoner’s dilemma, with its single non-cooperative equilibrium, represents a worst-case game. But the scenario models a common trading scenario. Nonetheless, we manage to trade, and find it in our self-interest to do so.