Prisoner's Dilemma Explained - Why Both Confess

The setup

Ada and Bo are held in separate rooms. Stay silent together: one year each. One testifies while the other stays silent: the talker walks, the silent one serves ten. Both testify: eight years each. What happens?

Short answer: Both testify and serve eight years - even though staying silent together costs one year each.

Check each choice against each of the other player's choices

Take Ada's view. If Bo stays silent, Ada's options are one year (silent) or zero (testify) - testifying is better. If Bo testifies, Ada's options are ten years (silent) or eight (testify) - testifying is better again.

Testifying is better for Ada no matter what Bo does. That is a dominant strategy, and the game is symmetric, so it is dominant for Bo too. Both testify; both serve eight years.

Why the outcome is stable even though it is bad

(Testify, Testify) is the Nash equilibrium: neither player can improve by changing their own choice alone. Ada switching to silence while Bo still talks moves her from eight years to ten.

The frustrating part is that (Silent, Silent) is better for both - one year each. It is simply not stable: from there, each player gains by defecting, which is exactly what makes it collapse.

What actually breaks the trap

Repetition. If the same two players face the game again and again with no known final round, strategies like tit-for-tat make cooperation self-enforcing, because today's defection is punished tomorrow.

Enforceable agreements do the same job: anything that changes the payoffs for defecting changes the equilibrium. What never works is talk alone - promises that cost nothing to break do not move the matrix.

Why interviews ask it

Interviewers use this to check you can separate what is jointly best from what is individually stable, and that you say 'dominant strategy' and 'Nash equilibrium' about the right cells.