Economics

Two rational people can guarantee a worse outcome for both of them

Two suspects, held separately, are each offered a lighter sentence for betraying the other. If both stay silent, both get a light sentence; if both betray, both get a heavy one — yet betrayal is each one's individually 'safer' bet regardless of what the other does. Rational self-interest, played out by both sides, locks them into the worse result for everyone.

Merrill Flood & Melvin Dresher; formalised by Albert Tucker, A Non-Cooperative Equilibrium (formalisation of Flood & Dresher's game) — RAND Corporation, 1950

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