The Prisoner’s Dilemma and Game Theory

Two suspects are arrested. If both stay silent, each gets 1 year. If one betrays and the other stays silent, the betrayer goes free, the silent gets 10 years. If both betray, each gets 5 years. Rational self‑interest leads both to betray (dominant strategy), yielding (5,5) instead of the cooperative (1,1). This paradox shows why individually rational choices can lead to collectively worse outcomes. Repeated games allow cooperation via tit‑for‑tat. The prisoner’s dilemma models arms races, price wars, and climate change negotiations.