CHAPTER 4C
The Prisoner's Dilemma
The classic prisoners dilemma, described by Rapoport and Chammah (1965) is that two prisoners are accused of a joint crime, and are held unable to communicate with one another. If either confesses and testifies against the other, the non-confessor gets a much stiffer sentence. If neither confesses, the conviction is unsure, and a probable penalty is much lighter. If both confess, each gets jail. Do they trust one another to stay quiet, or will one "sell the other out" ?
There is a similarity in legal conflicts. Two individuals with a dispute can "trust one another" and appear pro se in court; "sell the other out" by getting a lawyer, or they both pay a lawyer, costing each more than the "trust one another" scenario.
Does our legal system encourage "trust one another" or "sell the other out" outcomes ?
The many graphs of Ashenfelter & Bloom (1993) prove that most parties which go to court without a lawyer, against a litigant who has a lawyer, have a low probability of success when compared to examples of conflicts resolved with adversarial lawyers on both sides, or no lawyers at all. ( see Appx G)
Each party following their individual interests create a situation in which both parties are worse off, but Ashenfelter & Bloom (1993) do not prove that individuals employ an excess amount of legal services as Tullock (1980) argued.