CHAPTER TEN

Design Spaces

FROM GAMES TO ECONOMIES

TWO PEOPLE ARE ARRESTED for a crime, but the police lack sufficient evidence to convict either one. An interrogator puts the two suspects in separate cells so they can’t communicate with each other. The interrogator tells each suspect that if he testifies against his partner, he will be given a reward for his help and released, provided his compatriot does not testify against him. If he testifies but his compatriot also testifies, then he will go to jail, but be given a reduced sentence for being helpful. But if he keeps quiet, he then faces two possibilities: If his partner also keeps quiet, ...

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