Everyone does what’s best for them, and everyone loses.
Game theory is the maths of decisions that depend on other people’s decisions. It explains price wars, arms races, penalty kicks, auctions and why cooperation is both fragile and surprisingly hard to kill. Play the most famous game of all, then watch strategies compete, evolve and settle into equilibrium.
The prisoner’s dilemma
Two suspects are questioned in separate rooms. Each can stay silent (cooperate with the other) or betray them (defect). Here the outcome is in points: more is better. You face a mystery opponent for 10 rounds. Can you work out its strategy?
Pick a move. Your opponent picks at the same time.
Axelrod’s tournament
In 1980 the political scientist Robert Axelrod invited experts to submit programs to play the repeated prisoner’s dilemma against each other, 200 rounds a match. The winner was the shortest entry: Tit for Tat, sent in by Anatol Rapoport. Pick the field, add some noise (mistakes), and run it yourself.
Cooperation on a grid
In 1992 Martin Nowak and Robert May put the dilemma on a grid. Every cell plays its eight neighbours, then copies whichever neighbour (or itself) scored best. Nobody remembers anything, yet clusters of cooperators can survive, and a single defector can grow into a kaleidoscope.
A cooperator earns 1 from each cooperating neighbour. A defector earns this much from each cooperating neighbour. Everyone else gets 0.
Find the Nash equilibrium
A Nash equilibrium is a set of choices where nobody can do better by changing only their own move. John Nash proved in 1950 that every finite game has at least one, if players are allowed to randomize. Pick a classic game or type your own payoffs.
Blue is the row player’s payoff, red the column player’s. An outlined number is that player’s best response to the other’s move. Where both are outlined, you have a pure Nash equilibrium.
Across: how often the column player picks its first move. Up: how often the row player picks its first move. The blue line is the row player’s best reply, the red line the column player’s. Every crossing is an equilibrium.
Guess two-thirds of the average
Everyone picks a number from 0 to 100. The winner is whoever is closest to two-thirds of the average. If people guess at random the average is 50, so you’d say 33. But if everyone thinks that, you should say 22… The only Nash equilibrium is 0. Does 0 win against real people?
The crowd mixes people who think zero, one, two or three steps ahead, plus a few who go straight to 0. Play several rounds: like real groups, they learn and drift toward 0.
The vocabulary of strategy
Where game theory shows up
From Cold War strategy to how doctors are matched to hospitals.