Prisoner ADon’t Confess Confess

Do

n’t

Co

nfe

ssC

on

fess

Pri

son

er B

The Prisoner’s Dilemma

Both jailed 15 yearsBoth jailed 15 yearsPrisoner A:

20 years

Prisoner B: Free!

Prisoner A: 20 years

Prisoner B: Free!

Prisoner A: Free!

Prisoner B: 20 Years

Prisoner A: Free!

Prisoner B: 20 Years

Both held for 6 monthsBoth held for 6 months

The Chemical Company’s DilemmaCompany A

Maintain Capacity Double Capacity

Mai

nta

in

Cap

acit

yD

ou

ble

Cap

acit

y

Co

mp

any

B

Company A: Lose lots of $

Company B: Lose lots of $

Company A: Lose lots of $

Company B: Lose lots of $

Company A: Make less $, lose market share

Company B: Make lots of $

Company A: Make less $, lose market share

Company B: Make lots of $

Company A: Make lots of $

Company B: Make less $, lose market share

Company A: Make lots of $

Company B: Make less $, lose market share

Company A: Make decent $

Company B: Make decent $

Company A: Make decent $

Company B: Make decent $