prisoner's dilemma:
two people are caught by the cops. their only evidence rests on the people ratting the other person out. here's the set-up:
you rat: 5 years
you don't rat: 10 years if the other person rats on you
you don't rat: 0 years if neither rat's the other out
you can't rely on the other person to keep quiet, so your best option is to rat the other out. do you feel lucky? I prefer to stay safe.
however, in the real world, you don't stop all interaction with this person after this event. in other words, you two will end up in this situation again. it's in this situation that tit-for-tat is the best strategy. Do unto others as they have done unto you. In the next iteration, if you ratted me out, I will rat you out. And then you'll rat me out. not exactly a happy picture, but then, in the real world in diplomacy, you can generally talk to your prisonmate.
(oh, and I quite possibly screwed up the numbers in the game, but the outcome is unaffected)
ABE:
just remembered this, but if you know that the game will have multiple iterations, the best opening strategy is to co-op--in this case, not ratting the other person out. you can get royally screwed in the short run (serving 10 versus 5 years), but in the long run, you'll win by then following with tit-for-tat. also, it doesn't hurt to establish a reputation for having blind trust in the other (and them knowing that you'll repeat their action in the next round)
Edited by kuresu, : No reason given.