Game Theory & Prisoner's Dilemma

Question 1

What is Game Theory?

Answer 1

A mathematical method for analyzing strategic interactions between actors in achieving a common goal

Question 2

How many parts are in a “game”?

Answer 2

A game has three parts
1. At least 2 players with
2. At least 2 strategies for each, which
3. Identify a set of joint outcomes
(can be described in a 2 x 2 table)

Question 3

What is the Prisoner’s Dilemma?

Answer 3

2 players with 2 strategies each. C - Cooperate with other prisoner (stay silent) / D - Defect on other prisoner (confess)

Question 4

What are the possible outcomes of the Prisoner’s Dilemma?

Answer 4

CC - Silent / Silent
CD - Silent / Confess
DC - Confess / Silent
DD - Confess / Confess

Question 5

How are the outcomes ranked from best to worst?

Answer 5

DC - Confess / Silent > CC - Silent / Silent > DD - Confess / Confess > CD - Silent / Confess

Question 6

How is pay-off determined?

Answer 6

Pay-off is determined by assigning each outcome a number based on its preferred ranking to each player (4 = most preferred / 1 = least preferred)

Question 7

What are some examples of the Prisoner’s Dilemma?

Answer 7

USA - USSR Arms Race
USA - China Trade War
Cuban Missile Crisis