The first comes from Eran Shmaya:
I heard this from Marco who heard it from Tzachi. Not sure what to make of it, but that will not deter me from ruminating publicly
There is a sack of chocolate and you have two options: either take one piece from the sack to yourself, or take three pieces which will be given to Dylan. Dylan also has two options: one pieces for himself or three to you. After you both made your choices independently each goes home with the amount of chocolate he collected.
The second from Presh Talwalker:
My friend Jamie is a professional poker player, and he came across a great example along the lines of the Prisoner’s Dilemma.
Here is what he reports:
I played a poker tournament at Caesar’s Palace last night with the
following setup: The buy-in is $65, which gets you 2500 chips. There
is also the option to buy an additional 500 chips for $5 more, giving
you a total of 3000 chips for $70. At 1 cent/chip, this add-on sounds
like a great bargain compared to the 2.6 cents/chip of the regular
buy-in.The kicker is that the house keeps the entire $5 add-on fee; none of
it goes into the prize pool.
Each of these is equivalent to a Prisoners’ Dilemma. That should be obvious in the first case. In the second case, notice that if you buy the additional chips you deflate the value of the others’ chips. (Poker seignorage!) If you were to present either of these examples to students, I would bet that most of them would play the corresponding Defect strategy. And this would make for a great teaching device if you show it to them before teaching the Prisoners’ dilemma. Because the usual framing of the prisoner’s dilemma suggests to students that they ought to be cooperative. This is the main reason students are often confused by the Prisoners’ dilemma.

8 comments
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March 16, 2010 at 2:11 pm
Mike Yeomans
In the case of #1, it could just be framing of gains versus losses. Thus, defect seems like the better option in gains because the outcomes are closer together (narrower expected utility distribution). In losses (i.e. the standard “prisoner” framing), you want to co-operate because people are risk seeking below the reference point, even though there’s increased risk of a blow-up.
Maps pretty well to prospect theory, actually. Are you saying there’s a further effect of prisoner vs. chocolate framing beyond moderated risk preferences? If anything you’d expect thinking about sharing chocolate to make people more prosocial, whereas if you’re dealing with prisoners, that seems anti-social.
No?
March 16, 2010 at 4:43 pm
michael webster
What do you mean by “equivalent”?
March 17, 2010 at 9:08 am
greg byshenk
I suspect ‘equivalent’ in the sense of options (cooperate or defect) and outcomes (my “best” outcome is when my partner cooperates and I defect; while the worst outcome is when we both defect).
March 17, 2010 at 11:57 am
Tim Randall
An interesting aside (for me) – how much value do you put on denying the other player any chocolate?
March 17, 2010 at 6:50 pm
tudza
With the prisoner’s dilemma, the prisoner’s know the rules for the pay off. Do the chocolate pickers know the pay off rules? If so, then cooperation is the obvious choice for this scenario as well.
November 23, 2010 at 3:02 pm
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