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Prisoner’s Dilemma: A Current Application

by Index Investing News
October 22, 2023
in Economy
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We saw a good illustration of the paradigmatic Prisoner’s Dilemma (widely used in economics and other sciences) when Sidney Powell, one of Trump’s lawyers after his 2020 defeat, agreed on October 19 to a plea deal and recognized her guilt for some misdemeanors. She also had to promise to testify at the trials of her alleged accomplices. (“Sidney Powell Accepts Plea Deal in Trump’s Georgia Case,” Wall Street Journal, October 19, 2023.)

Remember that to demonstrate massive election fraud against Trump, Powell promised to “release the Kraken.” The Kraken never came, but the incentives imbedded in the Prisoner’s Dilemma eventually did.

The prisoner’s dilemma is a game-theoretic model in which each player’s optimal decision is to defect, that is, not cooperate with the other player(s), whatever the latter does—even if, for each of them individually, the best would be that they all cooperate. Defecting is said to be the “dominant strategy” of each player.

Consider a non-technical description of such a game. Two prisoners or criminal defendants are charged with a crime they committed together. If none of them plea-bargains and confesses, less evidence will be available to the prosecutor and they will be convicted of less serious offenses. But given the structure of a Prisoner’s Dilemma game, whether or not the other one plea-bargains, my best decision (for me Powell), is to defect. If, on the one hand, the other does not plea-bargain (he cooperates with me) but I confess our crime, I can dramatically reduce my own punishment and perhaps even be granted immunity for my testimony. If, on the other hand, the other one does plea-bargain first (he defects), I will be the sucker and get a worse sentence than in any of the other possibilities.

I know that the other defendant makes the same reasoning from his point of view, which further motivates me to plea-bargain before he yields to the same temptation. I prefer being the rat to the risk of being the sucker.

The day after Powell’s plea deal, lawyer Kenneth Chesebro, another one of the 19 defendants (including Donald Trump) charged with conspiring to subvert the 2020 presidential election in Georgia, rushed to confess a felony in return for a reduced sentence, again with the promise to testify (“Kenneth Chesebro Accepts Plea Deal in Trump Georgia Case,” Wall Street Journal, October 20, 2023). Preceding Powell, Scott Hall, a minor figure, plea-bargained and admitted his guilt to misdemeanors. The Prisoner’s Dilemma model explains why the dominos are falling. The ones against whom they fall are the principals in the alleged crimes like Rudolf Giuliani and ultimately Trump himself.

This analysis would be valid even if none of the defendants is actually guilty. In 16th-century France, an accused witch would often denounce other witches with the (usually vain) hope of escaping punishment. This suggests that the combination of plea bargaining and liberticidal laws like the supposedly anti-mafia RICO sort of law is an extremely dangerous power to grant to Leviathan. But this does not change the general fact that strong incentives push any individual involved in an illegal conspiracy to spill the beans. It also explains (as I wrote before) why vast conspiracies involving a large number of individuals who take great risks are unlikely.



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