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Oxford, United Kingdom
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Wednesday 22 October 2008

Prisoner's dilemma

Firstly...What is Prisoner's Dilemma...Cooperation is usually analysed in game theory by means of a non-zero-sum game called the "Prisoner's Dilemma".The two players in the game can choose between two "sides", either "cooperate" or "defect". The idea is that each player wins or gains when both cooperate, but if only one of them cooperates, the other one, who defects, will gain more. If both defect, both lose (or win very little) but not as much as the "cheated" cooperator whose cooperation is not returned.This is the table can show the "prisoner's Dilemma"


Action of A\Action of B Cooperate Defect
Cooperate Fairly good [+ 5] Bad [ - 10]
Defect Good [+ 10] Mediocre [0]


The game got its name from the following situation: imagine two criminals arrested under the suspicion of having committed a crime together. However, the police does not have enough provements in order to have them convicted. The two prisoners are isolated from each other, and the police visit each of them and offer a deal: the one who offers evidence against the other one will be freed. If none of them accepts the offer, they are in fact cooperating against the police, and both of them will get only a small punishment because of lack of proof. They both gain. However, if one of them betrays the other one, by confessing to the police, the defector will gain more, since he is freed; the one who remained silent, on the other hand, will receive the full punishment, since he did not help the police, and there is sufficient proof. If both betray, both will punished, but less severely than if they had refused to talk. The dilemma resides in the fact that each prisoner has a choice between only two options, but cannot make a good decision without knowing what the other one will do.
For example 2 chocolate competitors like Twix And Mars.This is 2 brands which at first they will have some difficulties,for example price strategy.At first if both brands will have a high price on their products,so both of them will have a high profit!(We don't talk about the quality of the products,which means the quality is equal to both products)But if one of them drop the price,because their products are elastic,so that brand will have more customers,and so they will have more profit than the brand which still keep the price.But if the price of both products are is low,so they both will have low profit!So that's the difficulty that we don't know the price,the market of our competitor.So we must drop or rise the price at the right period of time.If not,we will lose "the game"

2 comments:

Examiner said...

I hope you understand all this......

Mr.Lex said...

Yes I understand!!!!Kekekeke...