A group of fully rational people would always pick Ally

A group of fully rational people would always pick Ally.

Attached: Zero_Escape_Vol._2_Virtue's_Last_Reward_(1).jpg (960x544, 116K)

I too remember AP microeconomics

why wouldn't one choose betray?

>A group of fully rational people would always pick Ally.
aka things that would never happen

Too bad people are not rational. It's basically communism vs capitalism.

Assuming that you are in a group of fully rational people is stupid.

Because if everyone picks Ally every time, everyone gets out together and no one has to fight against themselves, and just fight against their captor.
If people start picking Betray, then it just causes in-fighting and picking Betray yourself in order to not lose points, so then no one fucking goes anywhere.

If the reward for everyone is the same then sure, people would likely pick Ally. But the whole point of this exercise is that the Betrayer gets more out of betraying than allying, so the individual's greed comes into play.

In true one-time prisoner's dilemma, betrayal is the best strategy, although true prisoner's dilemmas tends not to occur in reality (for example, there's a matter of reputation to consider, most people would have non-zero emotional cost to betrayal that changes the payoff matrix...)

In iterated prisoner's dilemma the rational (optimal) strategy depends on the pool of opponents. Tit for tat for example tends to do well regardless of opponent's strategy (for starters, it reaches global optimum of cooperate-cooperate when both players employ the strategy). Conversely, "always cooperate" is exploitable and hence it's not a strategy fully rational people would employ: a rational agent would exploit you.

>pick Betray in your first AB game
>now nobody will trust you and always Betray you in the next games
Losing two points is worth gaining trust.