If you confess and John does not confess, you will go free and John will get 10 years in prison. If you do not confess and John does, he will go free and you will get 10 years in prison. If you both do not confess you will each get one year in prison. In turn, the police offer John the same options. This is the basic setup of the Prisoner's Dilemma. According to these choices and reasoning through self interest what is the most logical option that John and Jennifer will choose?.
Jennifer reasons all she knows is that John will either confess or not. She sets up two scenarios. In the first, John chooses to confess. She reasons from this scenario that if she confesses, she"ll get five years. If she doesn't confess she will get 10 years. Therefore, she should confess. In her second scenario, John chooses not to confess. She reasons from the second scenario that if she confesses she will go free. If she chooses not to confess she will get only one year in prison. Therefore, she again chooses to confess. No matter what John chooses Jennifer is better off if she confesses. John logically chooses to confess from the same reasoning. .
Jennifer and John each conclude that they should confess. Then here is the dilemma. It seems clear that they should each confess by the above reasoning. But by both of them confessing, they each get 5 years. Had they each not confessed, they would have gotten only 2 years. What went wrong? Really, nothing. That is why this is a dilemma. No error can be found in their reasoning. What is paradoxical is that by Jennifer and John doing what is in each of their best interests, they act contrary to their best interests. It is a remarkable result that Jennifer will be better off if she does what is not in her best interests and John will be better off if he does what is not in his best interests. .
A prime example of this basic problem of cooperation and self-interest is portrayed in the case where industrial nations have trade barriers on the other's exports.
