Barry Nalebuff Explains the Prisoner’s Dilemma

Question: What is the origin of the Prisoner’s Dilemma?

Barry Nalebuff: The Prisoner’s Dilemma goes back to two researchers at  RAND, Merrill Flood and Melvin Dresher and it’s a classic story; you’ve seen God knows how many movies.

You interrogate two prisoners separately and the idea is that anyone who confesses is given some leniency, provided they confess first. And, of course, if neither of the two confesses. I have limited evidence against them so they do pretty well. And if they both confess, then the immunity isn’t worth anything.

However, each one is afraid that the other one is going to confess and so therefore confesses, and the police get all the information that they want.

This also raises a couple of things, one that the outcome of the game, in this case confess-confess, can be good or bad from the player’s perspectives, depending on who you are. If you are the prisoners, well, then it’s a disaster. If you are the police or society, it can be a good thing.

We see this with OPEC. The question is, how much oil that any one country choose to bring to the market. And it’s almost the case, no matter what quantities other members of OPEC supply, each one wants to put more on. And then, of course, when everyone does put more, the cartel is much less effective.

 

Recorded on: Oct 2, 2008

Barry Nalebuff explains game theory’s most famous corollary.

Elizabeth Warren's plan to forgive student loan debt could lead to an economic boom

A plan to forgive almost a trillion dollars in debt would solve the student loan debt crisis, but can it work?

Photo credit: Drew Angerer / Getty Images
Politics & Current Affairs
  • Sen. Elizabeth Warren has just proposed a bold education reform plan that would forgive billions in student debt.
  • The plan would forgive the debt held by more than 30 million Americans.
  • The debt forgiveness program is one part of a larger program to make higher education more accessible.
Keep reading Show less

Banned books: 10 of the most-challenged books in America

America isn't immune to attempts to remove books from libraries and schools, here are ten frequent targets and why you ought to go check them out.

Nazis burn books on a huge bonfire of 'anti-German' literature in the Opernplatz, Berlin. (Photo by Keystone/Getty Images)
Culture & Religion
  • Even in America, books are frequently challenged and removed from schools and public libraries.
  • Every year, the American Library Association puts on Banned Books Week to draw attention to this fact.
  • Some of the books they include on their list of most frequently challenged are some of the greatest, most beloved, and entertaining books there are.
Keep reading Show less

Supreme Court to hear 3 cases on LGBT workplace discrimination

In most states, LGBTQ Americans have no legal protections against discrimination in the workplace.

(Photo by Andres Pantoja/SOPA Images/LightRocket via Getty Images)
Politics & Current Affairs
  • The Supreme Court will decide whether the Civil Rights Act of 1964 also applies to gay and transgender people.
  • The court, which currently has a probable conservative majority, will likely decide on the cases in 2020.
  • Only 21 states and the District of Columbia have passed laws effectively extending the Civil Rights of 1964 to gay and transgender people.
Keep reading Show less