Key Takeaways
- The Prisoner’s Dilemma is a situation where two people must make a decision that either benefits both parties or only benefits themselves.
- Each person decides alone, without knowing what the other will choose, and the outcome depends on both choices.
- When both people cooperate, they do better together, but fear often leads them to betray each other, leading to a worse outcome for both.
The Prisoner’s Dilemma is a scenario in which two people must choose to either cooperate or act in their own self-interest without knowing what the other will do. This concept has been used to study human behavior for decades and can be applied in psychology, economics, politics, biology, investing, and other areas where self-interest may clash with common interest.
How the Prisoner’s Dilemma Works
A concept in psychology and game theory, the Prisoner’s Dilemma “explains two people’s choices in trading off their self-interest with their collective welfare,” says Michael Taylor, the co-founder and CEO of SchellingPoint in West Chester, Pennsylvania. “It explains the thinking behind each option and their consequences.”
The idea was first developed in 1950 by mathematicians Merrill Flood and Melvin Dresher for the Rand Corporation’s investigations in game theory. They were interested in modeling Cold War strategies. “For example,” explains Taylor, “the U.S. and Russia needed to decide to reduce or increase their volume of nuclear weapons without being able to talk directly.”
Later, Albert W. Tucker developed a new version called the “Prisoner’s Dilemma” to make the concept more understandable to Stanford psychologists. In this version, two prisoners are charged with a crime and interrogated separately. Each is given a choice: betray the other and get a lighter prison sentence, or stay quiet. Neither knows what the other will do, but the outcome depends on their combined choices.
There are three possible outcomes:
Prisoner’s Dilemma Outcomes
- One prisoner betrays the other and confesses (defects) while the other stays quiet (cooperates). As a result, the defector is set free, but the cooperator gets a heavy sentence of 10 years.
- Both stay quiet (cooperate), and each gets a lighter sentence of 1 year.
- Both betray the other and confess (defect), and each gets a moderate sentence of five years.
The best outcome for both prisoners, says Taylor, is to cooperate, but the rational choice, in the sense that each of them will try to minimize their own punishment, is for each prisoner to betray the other and defect. This demonstrates the conflict between selfish interest and cooperation, and why the prisoners may fail to achieve the best collective outcome.
“The insight gained from this dilemma helps in analyzing situations where trust and collaboration are relevant but difficult to achieve,” says Niloufar Esmaeilpour, a Registered Clinical Counsellor, Approved Supervisor, and Founder of Lotus Therapy & Counselling Centre in British Columbia, Canada.
How Does the Prisoner’s Dilemma Appear in the Real World?
Taylor provides the following scenario as an example of the Prisoner’s Dilemma:
“Two parents living on a tight budget agree to control their spending… They can choose to cooperate, hoping the other will do so, too, or ignore the agreement so they don’t suffer having little money to spend.
“This is the easy choice if they have little trust in the other person. Why reduce their spending if they don’t think their partner will abide by their agreement? If they continue spending and their partner does, too, they are justified in not acting on the agreement. If they continue spending and the other doesn’t, even better, they don’t have to reduce their spending, but their joint problem improves.”
This type of scenario can occur across many contexts, from leadership teams worrying about budgets to business partnerships to global issues such as the climate crisis. For instance, Esmaeilpour points to real-life examples such as “the arms race between countries where mutual disarmament will benefit both, but mistrust compels them to arm.”
“Another example,” he says, “is business competition, whereby firms underbid to share the market, which hurts both firms in the long term. Environmental problems such as overfishing mirror this dilemma where [short-term] individual gain leads to [long-term] collective harm.”
This is the trouble with many real-world examples of the Prisoner’s Dilemma. As Taylor says, “the self-interested gain is short-term and tangible, but the collective gain is long-term and intangible.”
He cites problems like deforestation, vaccination, and cultural change to make his point. For example, while the people who cut down acres of forest will see a benefit now, in the long term, we all suffer because there is less oxygen in the air and shade on our planet, though that consequence is harder to grasp.
Variations of the Prisoner’s Dilemma
We’ve talked mostly about a single-round game of the Prisoner’s Dilemma, but there can be games of multiple rounds, too. A game where two players take more than one turn in succession is called an iterated Prisoner’s Dilemma.
There can also be multiple players as well as multiple rounds. According to Esmaeilpour, these versions of the game “can model complex social interactions.”
Taylor gives real-life examples. “Family members, leadership teams, joint ventures, countries. These are known as… repeated games, and communication can occur, even if not directly, by sending each other signals through words and actions intended to be interpreted a certain way.”
What Is the Best Strategy in the Prisoner’s Dilemma?
There are many strategies for playing the Prisoner’s Dilemma, including always defecting or always cooperating. However, one of the best strategies for a Prisoner’s Dilemma game with iterated rounds is called tit-for-tat. There are just two instructions for this strategy:
- In the first match, cooperate.
- In every match after that, do what the opponent did in the previous match.
The reason for tit-for-tat’s success appears to be that it’s nice, but it’s not so nice that you become a pushover. If one player is betrayed, they betray back, but are ready to forgive if their opponent cooperates in the next round.
In practice, says Taylor, tit-for-tat can be used to organize groups “to cooperate for the collective good over personal gain.
“The group identifies a shared topic requiring coordinated action toward a goal that benefits them all,” Taylor continues. “They ensure that each team member’s first action is cooperative, supporting that shared goal. Subsequently, in future decisions on the topic, the cooperators choose to cooperate, or [they] defect if one or more members defected previously. Over time, this teaches that defection will be… acknowledge[ed] and punish[ed] with defection, and that a return to cooperation will be rewarded.”
Criticisms and Limitations of the Prisoner’s Dilemma
There are several criticisms and limitations of the Prisoner’s Dilemma. For instance, Esmaeilpour says that the Prisoner’s Dilemma “simplifies the complexity of human behavior when most decisions in the real world are not reduced to simple, binary choices.
“Moreover,” Esmaeilpour continues, “the dilemma does not consider long-term relationships where issues of trust and reputation play very important roles.”
However, in the real world, where trust and reputation are often automatically assessed, the Prisoner’s Dilemma could reveal their influence on strategic decisions.
Verywell Mind uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Kuhn S. Prisoner’s Dilemma. Stanford Encyclopedia of Philosophy. September 4, 1997.
Tobin J. The prisoner’s dilemma. University of Michigan Heritage Project.
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