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Game theory/Prisoner's dilemma

so http://www.endofcontrol.com/ gave me a slappy slap slap. the guy just lays it out flat. it's like arthur ashe comes up to john mcenroe at a davis cup final and says to him during the break "wake up, you piece of shit". i better say "yes sir, yes sir, three bags full sir!" (not exactly coldplay/keane material and stop emoting at the end).

anyway. here are some more ponderings and waste of internet bandwidth.
i am optical and wifi, so no problem!

Game theory

Game theory is a branch of applied mathematics that is often used in the context of economics. It studies strategic interactions between agents. In strategic games, agents choose strategies which will maximize their return, given the strategies the other agents choose. The essential feature is that it provides a formal modelling approach to social situations in which decision makers interact with other agents. Game theory extends the simpler optimisation approach developed in neoclassical economics.

Prisoner's dilemma

Many points in this article may be difficult to understand without a background in the elementary concepts of game theory.

In game theory, the prisoner's dilemma (sometimes abbreviated PD) is a type of non-zero-sum game in which two players may each "cooperate" with or "defect" (i.e. betray) the other player. In this game, as in all game theory, the only concern of each individual player ("prisoner") is maximizing his/her own payoff, without any concern for the other player's payoff. In the classic form of this game, cooperating is strictly dominated by defecting, so that the only possible equilibrium for the game is for all players to defect. In simpler terms, no matter what the other player does, one player will always gain a greater payoff by playing defect. Since in any situation playing defect is more beneficial than cooperating, all rational players will play defect, all things being equal.

The unique equilibrium for this game is a Pareto-suboptimal solution—that is, rational choice leads the two players to both play defect even though each player's individual reward would be greater if they both played cooperate. In equilibrium, each prisoner chooses to defect even though both would be better off by cooperating, hence the dilemma.

In the iterated prisoner's dilemma the game is played repeatedly. Thus each player has an opportunity to "punish" the other player for previous non-cooperative play. Cooperation may then arise as an equilibrium outcome. The incentive to defect is overcome by the threat of punishment, leading to the possibility of a cooperative outcome. If the game result is infinitely repeated, cooperation may be a Nash equilibrium although both players defecting always remains an equilibrium.

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