Sucker's Payoff Case Study

330 Words2 Pages

The table above represents the situation narrated in the introduction. C represents the

choice of Cooperating with the other prisoner, which means remaining in silence and D

represents the choice of Defecting, which means blaming the partner. Depending on their

choices, the prisoners would have different payoffs4

, which are:

T (0 years) (Temptation Payoff) - Earned by the one who defects while the other cooperates.

R (1 year) (Rewarding Payoff) - Earned by both if they cooperate with each other.

P (2 years) (Punishment Payoff) - Earned by both if they defect.

S (3 years) (Sucker’s Payoff) - Earned by the one who cooperates while the other defects.

If a prisoner defects, then he will spend either 0 or 2 years in the jail depending on what …show more content…

However, if the

prisoner were to cooperate, he would spend either 1 or 3 years in prison depending on what the

other does, which means that he would receive either a rewarding payoff or a sucker’s payoff.

Therefore, no matter what, the safest option is to defect no matter what, because the prisoners

will not be taking the risk of facing the Sucker’s Payoff and will have the chance of being set

free, depending on the partner’s choice. If a prisoner were to cooperate, he would either face 1

year prison or the Sucker’s Payoff, which is the worse payoff among all the possibilities.

Example 2: Repeated Game

When the Prisoner’s Dilemma is played more than once, the players have the opportunity

to build strategies, because when a new round begins they know which action was taken by its

opponent in the previous game and from that they will be able to analyze what should their next

moves be. To better explain what happens in a repeated game, I constructed the next diagram

representing the point of view of Prisoner 1 during the repetition of the game from example

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