The Prisoner's Dilemma

Of the economic choice games I’m familiar with, I’m going to have to opt for the classic prisoner’s dilemma as my favorite.  While it’s hard to be emotionally attached to a mathematical model—at least for me, though I’m sure there’s someone out there who is—I believe it rightly inspires awe for the explanatory power it provides. 

It seems as if there’s an almost limitless number of ways to adjust the parameters of the game: you can change the number of players, iterate the game a certain number of times (or assume it’s played indefinitely), alter the reward distributions, alter the participants’ knowledge of their partner’s intentions, and so on.  Each alteration provides the game with new explanatory powers.  I don’t claim to be familiar with all of them, but it’s clear that the prisoner’s dilemma can be used to derive profound insights from fields as varied as political science, economics, and even evolutionary theory. 

The latter is probably my favorite example of how the game can arrive at powerful theoretical explanations.  If applied to evolutionary theory, the prisoner’s dilemma (and, additionally, other economic choice games) can provide a model by which altruistic behaviors may be selected for in nature.  The explanation is perhaps too long to get into here, but the gist of it is that if organisms enter into a game on the assumption that both will cooperate on the first turn, then both will have the greatest opportunity for long-term benefit.  This encourages altruistic behaviors, at least at the outset, though of course rational self-interest can take back over if one of them cheats. 

While I don’t understand every application of the prisoner’s dilemma—there are few who actually do—it continues to intrigue me like no other economic game.