Prisoner’s dilemma is widely used in both international and domestic politics. When arranging treaties or reaching a compromise, many apply prisoner’s dilemma to come up with an ideal situation for both sides.
One of the main areas where prisoner’s dilemma is mentioned is when dealing with international environmental issues. Without reaching a compromise, all countries will be affected negatively since the earth as a whole will receive a damage without any of the countries’ efforts for a better environment. However, the needs for a better environment and the status of the environment vary within countries. Therefore, some countries will need to put in more effort and money while the others might not have to do so.
An article in TheHill.com provides a very specific example of prisoner’s dilemma regarding environmental problems.
“The United States and China are the two largest emitters of greenhouse gases. They seem unable to co-operate even though it would be beneficial for both of them – as well as for everybody else – if they did so. Realizing those benefits requires a level of trust that does not exist. Without that trust, the United States, China, and other major emitters of greenhouse gases will not take sufficient action to avoid catastrophic climate change.
The United States and China are locked in a classic “prisoners’ dilemma,” a fundamental problem in game theory that demonstrates why two parties might not cooperate even if it is in both their best interests to do so. As long as this impasse lasts, the future climate for everyone is held hostage.
Fortunately, the strategy for escaping from a prisoners’ dilemma, called “tit-for-tat,” has been known for sixty years. Each party must make and reciprocate small, confidence-building measures. Each may also punish, but then forgive, any minor transgressions. This wisdom has kept nuclear war at bay and served as the basis for nuclear disarmament treaties that have been neither ratified nor flouted.”
Besides environmental problems, prisoner’s dilemma is applied to other areas as well. It is used to explain the situation of the United States and the Soviet Union during the Cold War and is also used to justify the need of government, contrary to Adam Smith’s ideologies.