A Prisoner’s Dilemma Classroom Activity with iClickers to Explain Game Theory to Economics Students
This is a very simple classroom game I do with my economics students to cover ideas of Nash equilibrium and Prisoner's Dilemma. It can also show ideas about public goods and externalities. It is an adaption from Hemenway et al 1987 (see below). But, it has also been used in different ways by many different instructors.
How to Setup the Prisoner’s Dilemma Classroom Experiment
Extra Point Question
If everyone chooses to collude, all students get 10 bonus points in final exam
If everyone chooses to collude, but one person defect, that person defecting gets 50 bonus points and no other student get any points.
If more than 1 person chooses to defect, no student get any points.
Allow the students to vote (I use iClicker in my class; but any system would work well).
Show students the results.
Students are usually very upset when I show the results for the first time. So I always allow them to play more than one round. Sometimes in between rounds, I ask them for ideas on how to "solve" the dilemma. Notice on the video below how the last round students are allowed to switch iClickers, yet the outcome does not change!!!
Anyway, it is a great activity because it takes very little effort to prepare, students like it a lot, and it has many points for applications and discussion.
The video below shows an instance of me playing the game with my students. On this occasion, I had about 500+ students in the classroom playing the game. Notice the distribution of the answers after I close the voting (remember, A) is colluding and B) is defect): most students choose to collude, but a few (around 30 or so) choose not to collude.