Have you ever wondered why people…

• Sabotage each other even when cooperation would benefit everyone?
• Start price wars that hurt everyone?
• Break friendships over seemingly small disagreements?
• Keep building weapons even when peace is possible?

It all comes down to one deceptively simple idea:

The Prisoner’s Dilemma.

Once you understand it, you will start spotting it everywhere, from classrooms to boardrooms, governments to your favourite TV show.

Let’s break it down in plain English…

How to Get an A* in A-Level Economics: Tips, Past Papers and Tuition

What is the Prisoner’s Dilemma?

At its core, the Prisoner’s Dilemma is a concept from game theory (the study of decision-making) that shows how:

Two people can make perfectly “rational” choices that leave both of them worse off than if they had cooperated.

The classic scenario:

• Two suspects are arrested. Police do not have enough evidence for the main crime.
• Each is offered the same deal in isolation.

Here is the payoff matrix including the Nash equilibrium:

The Prisoner’s Dilemma	Prisoner B Cooperates (Silent)	Prisoner B Defects (Betrays)
Prisoner A Cooperates (Silent)	Both get 1 year (short sentence)	A: 5 years (worst), B: goes free
Prisoner A Defects (Betrays)	A: goes free, B: 5 years (worst)	Both get 3 years (medium sentence) ✅ Nash Equilibrium

Key point:

• The Nash equilibrium occurs when neither prisoner can improve their outcome by changing strategy given what the other does.
• In this case, both betraying is the equilibrium, even though both would be better off cooperating.

Why the Prisoner’s Dilemma Matters

It is not just about criminals. It explains:

• Why businesses undercut each other
• Why arms races escalate
• Why people cheat in relationships
• Why group projects collapse
• Why global problems like climate change are so hard to solve

It highlights the tension between:

• What is best for me right now
• What is best for everyone in the long run

This is why it is taught in: Economics, Psychology, Politics, Philosophy, GCSEs, A-Levels, Ib and university courses.

Real-World Example

Two competing coffee shops

• Both can keep prices fair (cooperate) or undercut each other (defect).
• Both keep prices fair → both profit.
• One undercuts → that shop wins customers, the other loses.
• Both undercut → profits fall for both (Nash equilibrium).

What usually happens? Both undercut. Classic Prisoner’s Dilemma.

What It Teaches Us About Human Behaviour

• People are not always “stupid” when group outcomes fail.
• They are often being rational from their own perspective.
• However, when everyone acts this way, everyone loses.

It also raises questions:

• When should you trust others?
• When should you cooperate?
• How do systems encourage cooperation?
• Can rules or repeated interactions change outcomes?

Short answer: yes. This is central to economics, politics and psychology.

Why Students Struggle With It

It mixes:

• Logic, maths, psychology, ethics, real-world examples and exam technique.

Common mistakes:

• Confusing individual vs group outcomes
• Not explaining why betrayal is “rational”
• Failing to apply it to real-life examples
• Writing vague, non-specific answers

This is exactly where targeted tutoring makes a huge difference.

How to Master It (And Your Grades)

If you are studying:

• GCSE / A-Level Economics or Business
• A-Level Psychology / Politics
• IB Economics
• Or first-year university modules

We can help you:

• Understand it clearly (no waffle, no confusion)
• Apply it in exams effectively
• Write high-mark answers
• Use real-world examples confidently
• Stop losing easy marks

Final Thought

The Prisoner’s Dilemma is not just a theory.

It is a mirror of human behaviour; in business, politics and daily life.

Once you get it, you do not just understand your syllabus better…

You start seeing the world differently.

That is exactly what top grades, and real insight, are built on.