Game Theory Part 1: The Prisoners' Dilemma

This video introduces game theory and goes through an example of the prisoners' dilemma. It discusses the concept of Nash equilibrium and introduces the idea of a repeated game.

For more information and a complete set of microeconomics videos, see
http://www.economistsdoitwithmodels.com/microeconomics-101

by Economists Do It With Models

Category:

Education

Tags:

• economics
• microeconomics
• game
• theory
• prisoners'
• dilemma

[vhpiotr]

she has it little opposite, hoever it is not so easy to understand. Nash equilibrium is a common point where (all players together benefit at the most 5+5=10 in terms of years spend in prison) and if a player exits and the rest remain, he/she looses (0+15=15). The worst is 10+10 = 20. The ingenious idea of Nash rewarded Nobel prize is that he showed, that we can find among possibilities a point in which everyone together can benefit.

[jodiecongirl]

@vhpiotr Actually, it's not necessarily the case that the Nash equilibrium is the best outcome for all players collectively, and even in this example we see that that is not the case, since the players could do better collectively by not ratting each other out, but private incentives prevent this from happening.

[slayyer2003]

@jimgauth She has in all backwards. WTF

[jimgauth]

@rcatalina100

Yeah, she has this exactly backwards, unless the goal is to spend more time in jail.

[jimobrienjunior]

@dorinioanaalexandra no the number represents a positive concept of "utility" as she explains, not years in prison. The players are attempting to obtain the highest number possible.

[tonyt0ny]

"economists do it with models" if you know what I mean

[ninuxy]

And the utility that she uses, i.e. quantified/measured happiness, does not reflect reality; that's why it's throwing people off.

Get your lectures proof-read.

[orionyildiz]

@jimgauth No,she is not backwards. She remarked that cooperate is sensible because sensible guy doesn'tnot want to break the mutual trustworthy and go down to 5. Because it is hard to come back 10 (cooperation) afterwards. If someone has understood the teamwork and get in it then s/he does not risk it for extra 5. Think someone who is in a mafia in long term perspective. Assume he is a professional and will come back to the court again.

[dorinioanaalexandra]

it's obvious that they should both choose to confess, who wants 10 or 15 years of jail ... if he confesses his chances are 0 years or 5 years

[NorseWarriorKing]

If I'm player 1 then player 2 had better realize that getting me sent to jail would be the death of him. Also the problem with this is that it excludes intangible benefits. Such as the preservation of honour. This only works when you assume that all humans are rational. We are not.

[rosewood223]

You are hot!!! I must confess that i want to Fuck you!!

[iichingg]

bullshit mental