Prisoner’s dilemma

Definition

The prisoner's dilemma is a scenario in game theory that demonstrates why two rational individuals might not cooperate, even if it appears that it is in their best interest to do so. It illustrates the problem of incentives in collective action by showing how individual pursuit of self-interest can lead to worse outcomes for all involved.

Related terms

Collective Action Problem: A situation where individuals' pursuit of their own interest leads to suboptimal outcomes for the group as a whole.

Nash Equilibrium:

A concept in game theory where no player can benefit by changing strategies while the other players keep theirs unchanged.

Free Rider Problem:

A situation in which some individuals benefit from resources or services without paying for them, relying on others to shoulder the cost