game theory example: prisoner's dilemmatwo people are arrested, the police know they are guilty. the police want the arrestees to confess, so they put them in separate rooms and tell them,
"we know you are guilty; if you rat on your friend, you will get off easier."
so if one of them says that their buddy done something wrong, he gets off easier. but if they both say that the other person did something wrong, if they both rat on each other, they're both screwed - they each get the longest combined sentences. but if they remain silent, they share the shortest combined sentence.
|prisoner A||confesses||a gets 3 years
b gets 3 years
|a gets 3 months
b gets 5 years
|doesn't confess||a gets 5 years
b gets 3 months
|a gets 1 year
b gets 1 year
now back to vaccines.so the best way to come out is either to have faith in your criminal partner, or to belong to a mafia/syndicate where no one talks.the prisoner's dilemma illustrates how choosing the best for yourself can be destructive, particularly when self-interest is the choice of all parties involved.
from october 2, 1997 notes taken during introduction to economics class with professor Bernard Saffran.