prisoners' dilemma

Definition

Economics

  • noun in game theory, a situation which shows the advantages of parties making a binding agreement before taking a certain action: supposing that various prisoners are interrogated separately and each knows that if no one confesses then each will get off free then, if one confesses, he or she will receive a lesser sentence than the others who do not confess; the result is that all prisoners will confess because they hope to get lesser sentences. However if they all had agreed in advance that no one would confess, then they would all get off free. The conclusion is that if each party acts individually according to his or her own opinions, then the result is that all parties do worse than if they had acted in concert.
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