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Electricity restructuring and deregulation
Published in Peter M. Schwarz, Energy Economics, 2023
Notice that had they stuck to a high-priced agreement, they would have each done better. Such a game is a Prisoner’s Dilemma, a game in which the Nash equilibrium does not lead to the best outcome for the players. To avoid the Prisoner’s Dilemma, the two players could find a way to convert a noncooperative game into a cooperative game. If they know they will play this game repeatedly, the payoff for preventing the Prisoner’s Dilemma is greater. They may be able to build up trust that if they agree to a high price, they will stick to the agreement. If they cannot cooperate, they may have to resort to threats of retaliation if a firm violates the agreement. In order for a threat to work, it must be credible; that is, the potential violator believes that the other player will be better off if it carries out the threat than if it does not.
Quantitative Modeling of Dynamic Human-Agent Cognition
Published in Michael D. McNeese, Eduardo Salas, Mica R. Endsley, Contemporary Research, 2020
James Schaffer, James Humann, John O’Donovan, Tobias Höllerer
The second study, DD, was chosen due to its wide applicability, limited complexity, and research base. The Diner’s Dilemma is an n-player, iterated version of the basic prisoner’s dilemma. In the basic prisoner’s dilemma, two players decide to take an action (cooperate or defect) without communication beforehand, where defection leads to a higher outcome for an individual regardless of the other players’ actions, but with mutual cooperation leading to a higher outcome than mutual defection. The iterated form of this game can show evolution in player strategies as they learn the other player’s tendencies to defect or cooperate.
Force-System Resultants and Equilibrium
Published in Richard C. Dorf, The Engineering Handbook, 2018
A classical example used to introduce game theory is called the prisoner’s dilemma and is based on two suspects captured near the scene of a crime and are questioned separately by authorities such as the police. Each has to choose whether or not to confess and implicate the other. If neither person confesses, then both will serve, say, 1 year on a charge of carrying a concealed weapon. If each confesses and implicates the other, both will go to prison for, say, 10 years. However, if one person confesses and implicates the other, and the other person does not confess, the one who has collaborated with the police will go free, while the other person will go to prison for, say, 20 years under the maximum penalty. The strategies in this case are confess or don't confess. The payoffs (penalties here) are the sentences served. The problem can be expressed compactly in a payoff table of a kind that has become fairly standard in game theory, illustrated in TABLE 207.8. The entries in this table mean that each prisoner chooses one of the two strategies, that is, the first suspect chooses a row and the second suspect chooses a column. The two numbers in each cell of the table provide the outcomes for the two suspects for the corresponding pair of strategies chosen by the suspects as an ordered pair. The number to the left of the comma is the payoff to the person who chooses the rows, that is, the first suspect. The number to the right of the comma is the payoff to the person who chooses the columns, that is, the second suspect. Thus, reading down the first column, if they both
Growth rate, growth curve and growth prediction of tumour in the competitive model
Published in Mathematical and Computer Modelling of Dynamical Systems, 2020
Mahdi Sohrabi-Haghighat, Atefeh Deris
In the competitive model, presented by West et al. [21], a prisoner’s dilemma game matrix is introduced to determine the utility of healthy and cancer cells in competition to obtain oxygen, nutrients and proliferation of their species. The prisoner’s dilemma is an example of game theory, in which two individuals might not cooperate, even if the cooperation is the best action for both of them. This model has the ability to calculate the instantaneous growth of cancer cells which has been used to analyse the behaviour of tumour under chemotherapy [22–24].
Pricing of fresh food enterprises in different market structures
Published in Enterprise Information Systems, 2021
Dilupa Nakandala, Henry Lau, Jingjing Zhang
The numerical solutions demonstrate two extreme results. One is that the sole seller monopolises the market, fully manipulates market prices and receives the possible highest total profits, given the demand for all products available in the market. Another result is that the two sellers compete in the market providing that one seller takes actions, such as initiating discounts or changing discount rates and the other seller reacts immediately with a follow-up action. The result of such competition is lower profits for both sellers due to the price war. This result is similar to the classic case of game theory known as the prisoner’s dilemma. The prisoner’s dilemma describes a situation wherein competition results in worse results for both players. If the two sellers want to improve their profitability, based on game theory and on the numerical results, they should cooperate rather than compete. In this case, seller 1 should set her pricing policy for product 1 to be the same as a sole seller of product 1, and seller 2 should set her pricing policy of product 2 to be the same as a sole seller of product 2. However, in reality, the collusion of sellers is forbidden by governments because the higher profits of the sellers are at the expense of consumer surplus and the deadweight loss of total social welfare. The usual observed results are most likely in-between results. That is, the two sellers neither cooperate nor completely compete. The reasons for this are multi-faceted. Even if collusion is legitimate, the trust problems remain between the sellers, which is why the cooperation result cannot be achieved. However, in actuality, the two sellers are playing a multi-period game. That is, after the first scheduled period, the second period begins, followed by the third, etc. After several rounds, the competitors may obtain some understanding about each other and choose imperfect collusion (Lofaro 1999), which implies informal, oral or unwritten agreements among the sellers.
The Effect of Defection in Maximizing Group Benefit
Published in Applied Artificial Intelligence, 2023
The Prisoner’s Dilemma is a social dilemma game in which two players simultaneously take a choice between two options: to cooperate, or to defect. We assume that Figure 1 gives the payoff table of each transaction: