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 Course: Seminar Topic: Seminar Description: Cooperation is usually analyzed in game theory by means of a non-zero-sum game called the "Prisoner's Dilemma" (Axelrod, 1984).

How did the game get its name?
The game got its name from the following hypothetical situation: imagine two criminals arrested under the suspicion of having committed a crime together. However, the police do not have sufficient proof 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 be 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.

The two players in the game can choose between two moves, either "cooperate" or "defect". The idea is that each player 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 gain very little) but not as much as the "cheated" cooperator whose cooperation is not returned. The whole game situation and its different outcomes can be summarized by a table given below, where hypothetical "points" are given as an example of how the differences in result might be quantified.

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