September 2010
Intermediate to advanced
320 pages
11h 53m
English
Content preview from Sustainable Finance and Banking
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
Start your free trial
Appendix XII
The Prisoner's Dilemma
The original ‘prisoner's dilemma’ is easiest to explain using Table XII.1.
Table XII.1 The original prisoner's dilemma
Source: adapted from Varian (1987, p471).Note: figures represent length of sentence in months for each prisoner.
Two individuals have committed a crime together and are interrogated in separate rooms. Each of the prisoners has the option to plead guilty. If only one of the prisoners pleads guilty of the joint act, he is released (no sentence) and the other gets full blame (12 months’ sentence). If both plead innocent, they both receive a prison sentence of 1 month – for procedural reasons. ...