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The prisoner's dilemma is a type of non-zero-sum game. In this game theory problem, as in many others, it is assumed that each individual player is trying to maximise his own advantage, without concern for the well-being of the other player. This Nash equilibrium does not lead to a jointly optimum solution in the prisoner's dilemma; in the equilibrium, each prisoner chooses to defect even though the joint payoff of the players would be higher by cooperating. Unfortunately (for the prisoners), each player has an individual incentive to cheat even after promising to cooperate. This is the heart of the dilemma.

In the iterated prisoner's dilemma cooperation may arise as an equilibrium outcome. Here the game is played repeatedly. Since the game is repeated, each player is afforded an opportunity to punish the other player for previous non-cooperative play. Thus, the incentive to cheat may be overcome by the threat of punishment, leading to a superior, cooperative outcome.

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