Question

In a short written analysis (around 100 words), compare and contrast Ostrom’s original Prisoner’s Dilemma game with her Leviathan game. What is the main change that occurs in the move to the Leviathan game? Why – what role/benefit does Leviathan bring to the situation? What are some pros and cons that come with implementing Leviathan? What are alternative ways (i.e. institutions) that Ostrom suggests may achieve similar benefits? Focus on the institutions that she is modeling, not on the game theory per se.

Answer 1

First we clarify, what is the Prisoner’s Dilemma?

Prisoners Dilemma is the very interesting example to understand game theory. The prisoner’s dilemma explains the game theory which is propounded by Nash. In this particular example it note down the responses of two criminals and theory of games.

                Suppose there are two prisoners namely A and B. the following matrix shows their responses.

Criminal 1	Criminal 2
		Confess	Deny
	Confess	A      (1,1)	B         (1,5)
	Deny	C       (5,1)	D          (0,0)

                In the above matrix we have given the name to each cell to understand clearly what is the prisoner’s dilemma. In cell A if both the criminal confesses the crime they will have 1 year of imprisonment. In cell D, if both criminal is Deny of crime they will be free. In cell B, if criminal 1 confesses about crime and criminal 2 deny then criminal 2 have 5 years of imprisonment. In cell C the situation is vice versa. In the above matrix the dominant strategy is in cell D.