Scenario
Two conspirators are arrested and interrogated separately. If one implicates the opposite, he might go free whereas the opposite receives a life sentence. Yet, if each confess, dangerous fate befalls them. If each keep silent, insufficient proof can lead them being charged with and convicted of a lesser crime.
Description
Each player contains a dominant strategy. The ensuing equilibrium is Pareto dominated by an alternate outcome during which every player plays the dominated strategy.
Example
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Prisoner 2
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deny
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confess
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Prisoner 1
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deny
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2,2
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0,3
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confess
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3,0
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1,1
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General Form
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Player 2
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L
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R
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Player 1
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U
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a,w
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b,x
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D
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c,y
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d,z
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Where the following relations hold:
c>a>d>b
x>w>z>y