===A problem in game theory===--excerpt from Wikipedia with...

===A problem in game theory===
--excerpt from Wikipedia with minor changes--
(wli: I do feel we have the dilemma in the casual usage form rather than no classic or iterative form. There are huge amount of the players of the market games which make it could not work to defect for profit)

The prisoner's dilemma constitutes a problem in game theory.

--Classical form--

1. In its classical form, the prisoner's dilemma ("PD") is presented as follows:

2. Two suspects are arrested by the police.

3. The police have insufficient evidence for a conviction, and, having separated both prisoners, visit each of them to offer the same deal.
3.1> If one testifies (defects from the other) for the prosecution against the other and the other remains silent (cooperates with the other), the betrayer goes free and the silent accomplice receives the full 10-year sentence.
3.2> If both remain silent, both prisoners are sentenced to only six months in jail for a minor charge.
3.3> If each betrays the other, each receives a five-year sentence.

4. Each prisoner must choose to betray the other or to remain silent.
4.1> Each one is assured that the other would not know about the betrayal before the end of the investigation.

===How should the prisoners act?===

1. If we assume that each player prefers shorter sentences to longer ones, and that each gets no utility out of lowering the other player's sentence, and that there are no reputation effects from a player's decision, then the prisoner's dilemma forms a non-zero-sum game in which two players may each cooperate with or defect from (betray) the other player.

2. 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.

3. 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 cooperatively.

--only possible equilibrium: all players to defect--

1. 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.

2. No matter what the other player does, one player will always gain a greater payoff by playing defect.

3. Since in any situation playing defect is more beneficial than cooperating, all rational players will play defect, all things being equal.

--Iterated prisoner's dilemma, played repeatedly--

1. In the iterated prisoner's dilemma, the game is played repeatedly.
1.1> Thus each player has an opportunity to punish the other player for previous non-cooperative play.

2. If the number of steps is known by both players in advance, economic theory says that the two players should defect again and again, no matter how many times the game is played.

3. Only when the players play an indefinite or random number of times can cooperation be an economic equilibrium.

3.1> In this case, the incentive to defect can be overcome by the threat of punishment.
3.2> When the game is infinitely repeated, cooperation may be a subgame perfect equilibrium, although both players defecting always remains an equilibrium and there are many other equilibrium outcomes.

--In casual usage, no classic or iterative games--

1. In casual usage, the label "prisoner's dilemma" may be applied to situations not strictly matching the formal criteria of the classic or iterative games
2. The example are those in which two entities could gain important benefits from cooperating or suffer from the failure to do so.
3. or they could find it is merely difficult or expensive, not necessarily impossible, to coordinate their activities to achieve cooperation.