Understand the idea
A game specifies players, strategies, and payoffs. In a prisoners' dilemma, each player's individually dominant move produces a worse joint outcome than mutual cooperation. A Nash equilibrium describes mutual best responses, not necessarily fairness or social efficiency. Repetition, observability, preferences, and institutions can change incentives; repetition alone does not guarantee cooperation. [S39]
Worked example
In an invented two-person cleanup game, both cleaning gives each 3 points, neither cleaning gives each 1, and unilateral cleaning gives the cleaner 0 and the non-cleaner 4. Check every best response. Then add a credible future reward for mutual cleaning and examine what else must be known.
Where the idea stops
The model's conclusion depends on the payoffs and information. Real people may value fairness, reputation, or others' wellbeing; these can be represented rather than dismissed as irrationality. [S39]
Connect it
Psychology and culture: social preferences, trust, and institutional design.
Go deeper
How does a Nash equilibrium differ from a socially preferred outcome?
Sources
CORE Econ, The Economy 1.0 · Research reference · Date: 2017, textbook
Introduces payoffs, dominant strategies, social dilemmas, and repeated interaction.
Link checked 2026-10-17 · Public webpage accessed; no specialist peer review of this brief.