Prisoner's Dilemma
PROJECT PAPER
ON
PRISONERS’ DILEMMA
By
Vipul Mehrotra
A Study and Project Paper Submitted in Partial Fulfilment of
PREFACE
1. The industrial organization of transactions has changed dramatically during the past decade. Several scholars have discussed and documented the phenomenon of what has been called `the shrinking organization'. The apparent failure of `hierarchies' has been accompanied with the growing importance of cooperation in modern business. The latter poses a serious challenge to managers. The reason is that managers are educated to be competitive and to maximize their self-interested objectives. Moreover, cooperation is not socially embedded in modern societies. The purpose of this paper is to contribute to the understanding of the determinants of cooperative behaviour. More specifically, it is argued that individuals differ as to their inclination to cooperate.
2. The well known prisoner's dilemma game has become the classic economic example to demonstrate non-cooperative behaviour: Two contestants face a dilemma" in which, independent of the other's action, each player is better o_ by defection than by cooperation. But, the outcome obtained when both defect is worse for each player than the outcome they would have obtained if both had cooperated. Thus, self-interested behaviour does not unequivocally lead to a globally optimal solution. A common view is that this puzzle illustrates a conflict between individual and group rationality. Two players who both pursue rational self-interest may all end up worse of than if both act contrary to rational self-interest.
3. This paper is an endeavour to explain the game of Prisoners’ Dilemma with suitable examples.
LIST OF ABBREVIATIONS
No abbreviations have been used in the paper
PROJECT PAPER ON PRISONER’S DILEMMA
Introduction
1. Life is a question of choices, which each one has to make every day, and at each
ON
PRISONERS’ DILEMMA
By
Vipul Mehrotra
A Study and Project Paper Submitted in Partial Fulfilment of
PREFACE
1. The industrial organization of transactions has changed dramatically during the past decade. Several scholars have discussed and documented the phenomenon of what has been called `the shrinking organization'. The apparent failure of `hierarchies' has been accompanied with the growing importance of cooperation in modern business. The latter poses a serious challenge to managers. The reason is that managers are educated to be competitive and to maximize their self-interested objectives. Moreover, cooperation is not socially embedded in modern societies. The purpose of this paper is to contribute to the understanding of the determinants of cooperative behaviour. More specifically, it is argued that individuals differ as to their inclination to cooperate.
2. The well known prisoner's dilemma game has become the classic economic example to demonstrate non-cooperative behaviour: Two contestants face a dilemma" in which, independent of the other's action, each player is better o_ by defection than by cooperation. But, the outcome obtained when both defect is worse for each player than the outcome they would have obtained if both had cooperated. Thus, self-interested behaviour does not unequivocally lead to a globally optimal solution. A common view is that this puzzle illustrates a conflict between individual and group rationality. Two players who both pursue rational self-interest may all end up worse of than if both act contrary to rational self-interest.
3. This paper is an endeavour to explain the game of Prisoners’ Dilemma with suitable examples.
LIST OF ABBREVIATIONS
No abbreviations have been used in the paper
PROJECT PAPER ON PRISONER’S DILEMMA
Introduction
1. Life is a question of choices, which each one has to make every day, and at each