Prisoners Dilemma

Topics: Game theory, Economics, Nash equilibrium Pages: 5 (1499 words) Published: May 6, 2013
Prisoners Dilemma

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.

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 interests still serve a shorter sentence, they get more than they would if they were both silent and selfless. The optimal solution, which leads to the shortest sentence (one year), it is only altruism. In this mathematical problem, but the main driver of human psyche and selfishness factor. Absolute majority of people would simply nekooperovala because they had no hope that the "adversary / accomplice" would fall selflessness.

As an example from his own life would be introduced to what I remember as a small child. When I was little, I shared a room with my brother. We both own and common toys, but each of us prefer a different kind of toys. When we then get good grades in school, we were able to choose a new toy. The problem occurred in that when we had the toy from. I wanted a doll Babyborn, brother wanted spiraling "spinning top" Beyblade. There were thus various options. Either we could each separately to lie to parents and "blag" your toy, or we could agree to buy something more expensive for both (LEGO), and we agreed and got nothing. The table would look like this.

 | Brother |
   I | Strategy | Agreement | LIE |
 | Agreement | LEGO | Beyblade |
 | LIE | Babyborn | No toy |

Cooperation was then in our case the best possible and most efficient solution. If we chose a different strategy and selfish interest, neither of us would be satisfied. I can say that finally we our Star Wars LEGO very pleased.

Another similar example could be for instance the agreement between the two owners of the house that needs renovation. We are the owner of X and Y. owner can not stand one another, and therefore virtually communicate together (like customs). Both have a savings account (or accounts in general) are quite large sums, which adds value there. If both decide to place a portion of the capital's rich enough to cover all the costs of renovation. However, since each of them will follow primarily mainly his interest and appreciation of their money, the table...
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