Prisoner's Dilemma?

We had a prolonged TehTarik session last night that lasted till 4.30am. During that time, lots of things were discussed and one of the things that came up was game theory. As the rest of us were not very familiar with it, we asked the economists to explain a typical game to us, the prisoner’s dilemma.

You can read the details of the game on wikipedia. The gist of the problem is this:

Two suspects are arrested by the police. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal: if one testifies (“defects”) for the prosecution against the other and the other remains silent, the betrayer goes free and the silent accomplice receives the full 10-year sentence. If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge. If each betrays the other, each receives a five-year sentence. Each prisoner must make the choice of whether to betray the other or to remain silent. Each one is assured that the other would not know about the betrayal before the end of the investigation. How should the prisoners act?

Each prisoner can either choose to defect (D) or collaborate (C) with each other without knowing what the other chooses and make their decisions independently. But that is a rather false assumption because the decisions will never be independent.

For this game, the typical argument is that if we assume that the other prisoner chooses D, then we have to choose D too, in order to ensure a 5 year sentence for us. If we assume that the other prisoner chooses C, then we have to choose D in order to ensure that we go free. But if we assume that both prisoners are rational, the outcome would be DD, which indicates that CD is a transitionary state and the problem will not converge on that state.

Therefore, the only two possible points of convergence are CC and DD. CC happens by direct choice of both prisoners, and is a potential irrational point of convergence. DD is a potential rational convergence by being forced into it due to the situation. CD is rather impossible unless one of the two prisoners is an idiot. And of these two steady states, CC ensures the minimal punishment between the two. Therefore, if both prisoners are smart, they will both choose CC.

I don’t know why, but this is the way that my head works. That’s probably why I usually give odd-ball answers when asked questions like this during interviews. This is also why I have always struggled with probability in school because I can never quite see the same outcomes as the mathematicians. Maybe I’m just an irrational person or the irrational idiot who chooses C.

PS: Obviously, I’m not an economist nor a mathematician. I’m just an engineer who likes steady states and hates non-steady states.

Oh, after reading the wiki article further, I do think that I’m not weird anymore. I can understand why I strongly support Open Source as much as I do. A similar dilemma is present in the Open Source model of development. Being the irrational idiot that I am, I choose to support the Open Source model. I’m just happy to know that I’m not alone and there are many engineers who think the same way that I do. Also, the Open Source movement is on a slow but steady way to world domination.