The Prisoner’s Dilemma and the Emergence of Cooperation

Eric Anderson ()

Chapter Chapter 3 in Social Media Marketing, 2010, pp 35-52 from Springer

Abstract: Abstract John Nash’s concept of equilibrium demonstrates how games may have sub-optimal solutions that are nevertheless stable, because neither player can improve their condition unilaterally. Advertising is inherently a sub-optimal condition for both players: marketers would prefer to win consumers without spending money on advertising, and consumers would prefer to enjoy content without being advertised to. The concept of the Prisoner’s Dilemma illuminates this condition, because it suggests that consumers and marketers could reach a more satisfying relationship if they could coordinate cooperation. Studies conducted on iterative rounds of the Prisoner’s Dilemma demonstrate this natural evolution toward cooperation and reveal a set of conditions that make cooperation possible, but they also demonstrate the fragility of cooperation and the potential for downward spirals of mutual defection.

Keywords: Nash Equilibrium; Payoff Matrix; Downward Spiral; Product Placement; Banner Advertising (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-13299-5_3

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DOI: 10.1007/978-3-642-13299-5_3

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