BlueSky Thinking Summary

The prisoner's dilemma, a foundational concept in game theory, referring to situations in which individual incentives are at odds with collective outcomes.

Here is the classic thought experiment: two criminals have to make a choice, either to confess or remain silent;

the sentence depends on decisions the other makes.

While it is usual for confession to yield lighter individual penalties, only joint silence turns out to be in the best collective interest for the partners in crime.

Ehud Kalai has generalized this framework for complex scenarios, like RICO prosecutions of multiple conspirators, in which induction of confessions is strategic.

He defined "contagious strategies," where the decisions are influenced by a fear of others confessing, without there being a dominant strategy.

This approach proves to be potent in multiplayer settings and does not lack broader applications in economics or decision-making.

It shows just how powerful incentives are in tweaking the individual behaviors toward socially desirable outcomes.