Application of Prisoners Dilemma:

Prisoner's Dilemma is of interest to the social sciences such as economics, politics, and sociology, as well as the biological sciences such as ethology and evolutionary biology. This has a practical importance as all living beings are engaged in endless games of Prisoner's Dilemma.

Applications:

1) Prisoner's Dilemma scenario is used to illustrate the problem of two states engaged in an arm race, that is, to use weapons or not.

2) Cycle race - two cyclists may work together (mutual cooperation) by sharing tough load of the front position or makes an effort to stay ahead (mutual defection).

3) In Business - two competing firms must decide how much resources to devote to advertisement i.e. profits derived through advertising is more or less for them. A Prisoner's Dilemma occurs when both firm A and firm B have dominant strategies, so that the outcome is easy to predict.

4) Newspapers - if someone takes a paper without paying (defecting) but very few do, recognizing the resultants harm if everybody stole newspapers (mutual defection). This is called " magical thinking " with respect to pure Prisoner's Dilemma.

5) Each villager makes a choice for personal gain or restraint. The collective reward for defection is very low pay offs.