Strict dominance
A strategy strictly dominates another when it pays more against every strategy of the opponent. A player with a dominating strategy has no need to guess what the other will do.
In the prisoner's dilemma one strategy is strictly better than the other against every move of the opponent, so both players take it, and the cell they reach pays each less than the cell they passed over. The dilemma does not come from distrust; it is in the payoffs, and it goes away only when the payoffs change.
Core ideas
One definition, one argument that uses it, and one comparison that makes the argument uncomfortable.
A strategy strictly dominates another when it pays more against every strategy of the opponent. A player with a dominating strategy has no need to guess what the other will do.
If both players have a strictly dominating strategy, the pair of them is the only cell where both are best-responding. Nothing else in the table survives.
A cell Pareto-dominates another when it pays someone more and nobody less. In the dilemma the cell nobody chooses pays both players more than the cell everybody chooses.
The material
The argument is four comparisons, and then a fifth that goes the other way.
Two people are held separately and each is asked to stay silent or to inform on the other. The standard payoffs are written C for cooperating with the other prisoner (staying silent) and D for defecting (informing). The four payoffs are named: R for the reward when both cooperate, T for the temptation to defect against a cooperator, P for the punishment when both defect, and S for the sucker's payoff of cooperating against a defector.
Here R = 3, S = 0, T = 5 and P = 1, and the game is a prisoner's dilemma exactly when T > R > P > S. The ordering is the whole definition: temptation beats reward, reward beats punishment, punishment beats being the sucker.
Strategy A strictly dominates strategy B for a player when A pays more than B against every strategy the other player might choose.
Take the row player. If the column player cooperates, D pays 5 and C pays 3. If the column player defects, D pays 1 and C pays 0. D is better in both cases, by 2 in the first and by 1 in the second, so D strictly dominates C. The table is symmetric, so the same holds for the column player.
That settles the play without asking what either player believes. A player who is certain the other will cooperate should defect, since 5 beats 3. A player who is certain the other will defect should defect, since 1 beats 0. Each, then, defects, and the cell reached is D, D.
Cell X Pareto-dominates cell Y when every player gets at least as much in X as in Y, and at least one gets more.
Compare the cell reached with the one passed over. Mutual cooperation gives each player 3 and mutual defection gives each 1. So the only equilibrium of the game is Pareto-dominated, and the lab says so in the efficiency tile. That is the dilemma: each has a reason that does not depend on the other, and the reasons together defeat both.
The dilemma needs the ordering and nothing else. Lower the temptation from 5 to 4 and the ordering still holds, so D still dominates and the diagnosis stays the same. Set the reward at 4 and the temptation at 3, and against a cooperator cooperating now pays 4 where defecting pays 3. The ordering is broken, D no longer dominates, and mutual cooperation becomes an equilibrium alongside mutual defection.
The lab does not say which of these payoffs describes a real pair of prisoners, or whether real prisoners would not also care about each other. That would be a different table, and the computation would be on it.
Interactive
best responses, equilibria, dominance and efficiency, computed from the payoffs
Method
Four checks, in this order. A failure at any one means the game is something else.
If the same strategy is larger in every column, it strictly dominates. If it is larger in one and tied or smaller in the other, it does not.
Compare along each row. A dilemma needs the dominating strategy for both players.
That cell is the only one in which both players are best-responding; no belief about the other changes it.
If some cell pays both players more, the equilibrium is Pareto-dominated. That cell, not the equilibrium, is what the players would choose together.
Payoffs R = 3, S = 0, T = 5, P = 1.
Cooperating together gives each player 3 against 1. The shortfall is 2 for each, and no one is able to close it alone: a player who moves to C while the other holds D drops to 0.
Given a two-by-two table, check dominance for each player, name the cell the dominating strategies reach, and say whether another cell Pareto-dominates it. Then change one payoff so the verdict flips and say which.
Something to change about this lesson? Write it down, tick it off when it is handled, and export the list when you want to act on it. Kept in this browser only: nothing is sent anywhere, and nobody is notified.
No recommendations yet for this lesson.