Introduction
The topic of my thesis, I chose the issue of non-cooperative economic games, specifically the so-called "Prisoner's Dilemma". Game theory falls in microeconomics and therefore mainly in the economic analysis. It gives us an analysis of the way in which two or more entities interact, choose strategies that simultaneously influence each actor.
The greatest credit for the development of economic games have mathematician John von Neumann. Game theory can be used both to analyze the market, for example, to study the tariff policies of individual countries. In general, the "Prisoner's Dilemma" and other economic game also described as V of experimental economics.
Description
Prisoner's Dilemma is one of the most famous economic game that is presented in a variety of designs. It describes the behavior of the two entities, in our case, two people convicted of a felony they committed. The judge or prosecutor has enough evidence but only to the conviction of lighter crime, which is punishable by one year in prison. Offers therefore separately to each of the prisoners deal that if he confesses, gets only three months in prison for extenuating circumstances, while the other one you will serve a full 10 years. If both confess, both get 5 years. Neither of the prisoners but not communicating with the other, we do not know how it will proceed accomplice.
| Prisoner Y | Prisoner X | Strategy | confess | adversity SE | | Confess | 5 years for X5 years for Y | 3 months for years for X10 Y | | Adversity SE | 3 months for years to Y10 X | X1 for one year for year Y |
In the prisoner's dilemma, it is primarily a strategy returns. Regardless of what you do Y, X is likely to get a reduced sentence if he confesses. Thus, if both confess, they get logically 5 years. In this situation it is better for both prisoners to follow suit to avoid the 10-year-old prison. Overall, therefore, if the two entities will follow only their own selfish