The other day in class we talked about the prisoner’s dilemma, which, in brief, goes like this:
Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal. If one testifies (defects from the other) for the prosecution against the other and the other remains silent (cooperates with the other), the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must choose to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act? (from Wikipedia)
From a strictly rational, individualistic perspective, the choice is clear. One should defect. This choice results in a 50/50 chance between a 5 year sentence and complete freedom, depending on the choice of the other prisoner, while cooperation would result in, at best, a six month sentence, and a 10 year sentence at worst. No matter what the other player does, one player will always gain by defecting. Therefore, all things being equal, all rational players should choose defect.