Prisoner's Dilemma is a canonical example of a game analyzed in game theory that shows why two individuals might not cooperate, even if it appears that it is in their best interests to do so. The presentation takes you through various rounds of the game played at a business school.

2. The Team
Mona Siddharth R Sumedha
Sharma Sharma
Robin Agarwal Vivek Mehta

3. Agenda
• Case Background
• End Result
• Strategies
• Key Takeaways
• Learning applications
• Game Theory

4. Background
• The prisoners’ dilemma is the best-known game of strategy in
social science
• It helps us understand what governs the balance between
cooperation and competition in business, in politics, and in social
settings.
• The concept of the prisoners’ dilemma was developed by RAND
Corporation scientists Merrill Flood and Melvin Dresher and was
formalized by Albert W. Tucker, a Princeton mathematician.

5. Rules of the game

6. The Thought Process
Interpretation & Psychology
Different Interpretations Different Objective Definitions
3 primary issues at hand
i.Freedom
ii.Beat the other team
iii.Partners vs Competitors

7. End Result

8. Clash of Objectives

9. Incentive Break-up
Group 4
Don`t
Confess
Confess
Group 3
Don`t
3,3 -6,6
Group 4
Confess
Contribute Behave
Confess 6,-6 -3,-3 to common Badly
good
Contribute
Group 3 to common 3,3 -6,6
good
Behave 6,-6 -3,-3
badly

10. Strategy Analysis
Round Group 3 Group 4 Strategy Reason
If we had chosen " not confessed" . There were chances of
1 NC -6 C 6 Confessed
heavy penalty
We wanted to increase the gap between both the teams and
2 NC -6 C 6 Confessed
maintain our positive balance
Since the strategy was working for us and keeping us in
3 NC -6 C 6 Confessed
positive. So we stuck to "confession"
We were sure that they would go for confession and if we
4 C -3 C -3 Confessed
chose A we would get heavy penalty
We got the other team's signal but the stakes were even
5 C -6 C -6 Confessed
higher than last round.we stuck to our strategy of confessing

11. Strategy Analysis
Round Group 3 Group 4 Strategy Reason
We got two negative scoring in the last rounds.we didn’t go
6 NC -6 C 6 Confessed for "No confession"because if the other team had confess we
would have lost 6 points and got down to just 3
We were sure that the other team will go for Y keeping in
7 NC -6 C 6 Confessed
mind the last game.we wanted to play safe.
Keeping last two rounds in minds.we expected group 3 to
8 C -9 C -9 Confessed
chose Y and to minimize our losses we chose B again
9 NC -36 C 36 Confessed The stakes were very high in the last 2 rounds and it was too
late to cooperate with the other team as we couldn't send
signals and expect them to understand it. Therefore the team
10 NC -36 C 36 Confessed stuck to its option of B
Group 3 Group 4
Total -120 84

12. Key Takeaways
• More efforts into defining objectives
• Defining precisely the allies and competitors
• Understanding the implicit signals from the external party
• Different strategy for different positioning
• Strategy should be adaptable according to changing environment
• Playing safe always doesn’t help
• Don’t take any information on face-value

13. Learning Applications
Not
Adopt
Adopt
• The VISA check card
• Business choice and payoff in black Adopt 1,1 -1,0
• Customer`s choice and payoff in blue
Not
0,-1 0,0
Adopt

14. Learning Applications
Student 1
Not study Study
Student 2 Not study A,A D,A
Study A,D C,C

17. Thank You