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Prisoner's Dilemma
The Team



 Mona                    Siddharth R                 Sumedha
Sharma                                                Sharma




         Robin Agarwal                 Vivek Mehta
Agenda
•   Case Background

•   End Result

•   Strategies

•   Key Takeaways

•   Learning applications

•   Game Theory
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.
Rules of the game
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
End Result
Clash of Objectives
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
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
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
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
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
Learning Applications
                        Student 1


                        Not study   Study


Student 2   Not study     A,A       D,A


              Study       A,D       C,C
Prisoner's Dilemma
Prisoner's Dilemma
Thank You

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Prisoner's Dilemma

  • 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.
  • 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
  • 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