Priceonomics

 

The prisoner’s dilemma is an example of game theory that most economics students learn in their very first course. It describes a situation in which two individuals may not work together despite cooperation being in their best interest, and it often is used as a metaphor for all types of situations where people fail to cooperate. The coiner of the term described the situation as follows:

Two members of a criminal gang are arrested and imprisoned. Each prisoner is in solitary confinement with no means of speaking to or exchanging messages with the other. The police admit they don't have enough evidence to convict the pair on the principal charge. They plan to sentence both to a year in prison on a lesser charge. Simultaneously, the police offer each prisoner a Faustian bargain. If he testifies against his partner, he will go free while the partner will get three years in prison on the main charge. Oh, yes, there is a catch ... If both prisoners testify against each other, both will be sentenced to two years in jail.

Since each gang member will get a lesser sentence from betraying their comrade, game theory predicts that they will always testify in this situation. An experiment conducted with real prisoners, however, found that 56% of inmates chose to cooperate rather than betray their partner. 

More than 50 years after the formalizing of the prisoner’s dilemma, economists Menusch Khadjavi and Andreas Lange decided to see how real prisoners would do in the context. In their opinion, it is the first time that someone has done so. 

Unfortunately the authors did not use data from real interrogations that offered prisoners such a choice. Instead, they offered the prisoners of Lower Saxony’s primary women’s prison quantities of coffee and cigarettes consistent with the prisoner’s dilemma. Each prisoner pair would communally get the most coffee and cigarettes by cooperating. But “betraying” the other would result in personally accruing more coffee and cigarettes. 

As an extra kick, the experimenters ran the same exercise with a group of students using equivalent amounts of Euros. Thirty seven percent of the students cooperated compared to fifty six percent of the inmates.

While this is much more than game theory’s prediction of zero percent, the results did not shock anyone. Psychologists and behavioral economics dutifully record the ways in which humans do not act like rational profit maximizing machines, and the influence of pro-social forces on prisoner's dilemmas has been well documented

On the question of why the prisoners beat the students so handedly, it’s an open question. But maybe it’s something you learn in prison.

Another recent study examined the conception of prisons as “finishing school for criminals” - in line with the quote from the crime flick Blow, “Danbury wasn’t a prison, it was a crime school. I went in with a Bachelor of Marijuana, came out with a Doctorate of Cocaine." The author, sociologist Donald T. Hutcherson II, looked at the illegal earnings of people who did and did not experience incarceration. Due to the way in which prison time hinders legitimate employment prospects, allows prisoners to learn from each other, and facilitates the formation of a social network of criminals, he discovered that imprisonment led to a $11,000 boost in former prisoners' illicit earnings.

We don't have much insight into the ways criminals try to overcome law enforcement's efforts to entice them to rat each other out. But we would not be surprised to learn that the people most likely to face the prisoner's dilemma are best at resolving it. 

This post was written by Alex Mayyasi. Follow him on Twitter here or Google Plus. To get occasional notifications when we write blog posts, sign up for our email list.



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