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How does the prisoner’s dilemma work?

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A colorful payoff matrix for a normal form game in game theory, showing strategy options-support, oppose, evade-for both party A and party B. Each cell contains cartoon figures representing each party's action and lists percentage payoffs for A and B. The bottom-right cell is labeled saddlepoint, highlighting the equilibrium. — game theory Table 1
The normal-form table illustrates the concept of a saddlepoint, or entry, in a payoff matrix at which the expected gain of each participant (row or column) has the highest guaranteed payoff.

The prisoner’s dilemma is a foundational concept in game theory that illustrates the conflict between individual self-interest and collective benefit.12

How It Works

In the classic scenario, two suspects are arrested and held in isolation. Each must decide whether to confess or remain silent without knowing the other’s choice. The consequences are structured so that:
* If both remain silent, they receive a light sentence.12
* If one confesses while the other remains silent, the confessor goes free while the other receives a harsh sentence.12
* If both confess, they both receive a moderate, yet significant, sentence.12

The Paradox

Superficially, it is in each prisoner's rational self-interest to confess, as it guarantees a better outcome regardless of what the other does. However, when both act on this self-interest, they reach a Nash equilibrium—a state where no player can improve their outcome by changing strategies alone—that leaves them both worse off than if they had cooperated by remaining silent.213

This dilemma models many real-world situations, such as arms races, price wars, and biological competition, where individual pursuit of gain leads to suboptimal outcomes for all parties involved.24