The Prisoners dilemma
The Prisoners dilemma game is conceptualised as a non-cooperative game where all players have complete information. There is no communication.
It encapsulates the 'tragedy of the commons' assumption that people are self-interested.
"Therein is the tragedy. Each man is locked into a system that compels him to increase his herd without limit - in a world that is limited. Ruin is the destination toward which all men rush, each pursuing his own best interest in a society that believes in the freedom of the commons." (Hardin 1968)
So the players in the game are herders using a common grazing meadow. There is a maximum limit to the number of animals that can be grazed on the meadow and be well fed. This is 'x'.
In a two-person game, the cooperate strategy would be to equally share the land with an equal number of cattle grazing. This would be x/2 animals for each herder.
The defect strategy would be for each herder to graze as many animals as possible that could then be sold at profit. This number would be > x/2
Our herders are Sam and Joe.
Sam could decide to herd as many animals as possible, if Joe also decides to do that then the land becomes overgrazed and nobody makes a profit. (Confess/Confess)
If Sam decides to herd as many animals as possible secretly but Joe decides to herd a smaller amount of animals out of consideration for the land then Sam ends up doing well and profiting by 11 units. Joe ends up losing -1 unit. (Confess/Stay Silent)
Alternatively, Joe could decide to herd as many animals as possible without telling Joe and so Sam herds a far smaller amount of animals. Joe does well and profits by 11 units whilst Sam loses -1 unit.
Another outcome is for Sam and Joe to cooperate and divide up the land between them and graze a smaller amount of animals each. In this case, each gets 5 units of profit.
The game part plays out as follows:
| Sam | Joe | Outcome |
|---|---|---|
| defect | defect | Both get 0 units of profit |
| defect | cooperate | Sam gets 11 units of profit, Joe gets -1 |
| cooperate | defect | Joe gets 11 units of profit, Sam gets -1 |
| cooperate | cooperate | Both get 5 units of profit |
Value system
So what is the best payoff individually?
Individually, by pursuing my 'rational self-interest' and defecting and grazing as many animals as possible gives Sam the highest payoff as he gets either 0 or 11 units regardless of what Joe does. 0 is higher than -1 and 11 is higher than 5.
If Joe is also a rational, self-interested person and takes the same strategy then the most likely outcome for both of us is 0.
However, if I am not coming from the mindset of rational self-interest and instead, my interest is one of communal harmony or long term preservation of the land. Then coming from this value system I want to preserve the land and so I decide to cooperate for the good of the land.