The prisoners’ dilemma and the mini-max strategy by Charles Warner The Prisoners’ Dilemma



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Background

John von Neumann conceived of the basic precepts of game theory in 1928 when analyzing the game of poker. Von Neumann was a brilliant mathematician, so he put the precepts of game theory into a mathematical format, which he later expanded to apply to economics. But von Neumann’s first theorem, the mini-max theorem as stated above was the basic foundation of game theory.

Von Neumann’s original insight was that when playing a zero-sum, two-person game, a person must make moves based on the probable moves of his competitor, assuming both players are rationale, and try to minimize the competitor’s maximum gain.

Therefore, every move in a game must be based on an assessment of what a competitor’s possible moves are.

Von Neumann’s original game theory, the mini-max theorem, works only under the following conditions:


  1. There are only two players.

  2. Both players are rationale and desire to win and to avoid a loss.

  3. It is a zero-sum game (one player’s win is


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