How to Choose Your Decisions | The Prisoner's Dilemma | NASH Equilibrium
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Description:
Is there a way to always come out on top in conflict and negotiation situations in our daily lives?
Experts in economics and mathematics have been trying for centuries to calculate and predict human behavior to find a magic formula capable of bringing gains to whoever uses it!
And that's where the so-called prisoner's dilemma came from!
The study was originally formulated in 1950 by Merrill Flood and Melvin Dresher and, over the years, was reformulated by several scholars in the field until it arrived at what we now call the "prisoner's dilemma."
One of the most well-known scholars to contribute to game theory was John Nash!
Nash was an American mathematician who struggled with schizophrenia.
His willpower and love for learning overcame any obstacles life threw at him, and in 1994, he won the Nobel Prize in Economics for his contributions to game theory.
And if you're unfamiliar with Nash's story, I recommend "A Beautiful Mind," a film that chronicles John Nash's journey to developing his theories and his struggle with the disease! This film is truly excellent; it even won four Oscars!
But before explaining Nash's theory, let's briefly explain the prisoner's dilemma.
Let's assume you and I are accused of committing a crime together, and the authorities manage to arrest us.
They place us in individual cells for interrogation. However, before the interrogation, a police officer visits each cell and presents us with several options.
If you decide to confess, and I deny the crime, you will spend one year in jail while I will be imprisoned for 10 years. This also applies to me if I choose to confess and you don't.
Another solution would be for both of you to refuse to confess. If that were to happen, each of us would spend two years in prison.
On the other hand, if we both decide it's best to tell what happened, we'll both be imprisoned for three years and then both of us would be released.
The best possible solution for both of us would be for both of us to deny it, and then we'd both be released together in two years.
But this is a very risky option, because if the other party doesn't deny committing the crime, one of us would be imprisoned for 10 years.
#JohnNash
#HowtoMakeDecisions
#MakeGoodChoices
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Keywords:
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How to Choose Your Decisions | The Prisoner's Dilemma | NASH Equilibrium