Designer's dilemma

Designer's dilemma

Designer 1/Designer 2         Accept          Refuse

Accept                      (500,500)        (1000,0)

Refuse                       (0,1000)        (100,100)

The “Prisoner’s Dilemma” can be easily applied to more realistic manufacturing problems.  Imagine two designers available for design work.  However, there is a manufacturer who does not have sufficient resources for both designers.  The two designers are isolated from each other and the manufacturer visits each of them and offers them a deal.  If only one designer accepts the deal, this designer will carry out the whole project and receive all the payment.  If neither of them accepts the offer, the manufacturer will keep them for future projects, thus paying them a royalty.  However, if one of them refuses the job, that designer takes no further part in the process and receives no payment. If both accept, and thus will be working together, each will receive less than if one had refused the job.  The dilemma resides in the fact that each designer has a choice between only two options, but cannot make a good decision without knowing what the other one will do. Due to the uncertainty with the opponent’s action, a rational player would realise that the opponent might confess (accept), thus leaving him with the worst payoff. To be on the safe side he will choose to confess (accept). If both players are rational, the solution to the Prisoner’s Dilemma is that both should confess (accept).

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