Abstract: Suppose that two bank robbers are caught by the police after a heist. They are placed into separate rooms with no means of communication and given two options: confess to the crime, or blame the other person. If both robbers confess, the judge will be merciful and each will be given a 2-year sentence. If both blame the each other, they will be each be given a harsher 5-year sentence. If one confesses and the other does not, the one that confesses will get a 10-year sentence and the other one will go free. If you were in this situation, what would you do? This is known as the Prisoner’s Dilemma.
The Prisoner’s Dilemma is an interesting game that suggests that a rational individual’s best option is to avoid cooperating with others, even though it may cause more harm. While this game may be completely analyzed when played once, what happens if the game is played repeatedly by two individuals? Is there a strategy to improve one’s overall performance? Can this give rise to cooperation? We will examine this Iterated Prisoner’s Dilemma with some computer simulations.
