A social dilemma is a situation in which an individual’s narrow self-interest and the interests of a larger social group are directly at odds and in which, if every individual attempts to maximize his own benefit at the expense of the group, every group member experiences a worse net outcome than they would have if they had adopted a cooperative strategy. The idea of the social dilemma has been much studied by game theory scholars. The prisoner’s dilemma is one good example of a social dilemma. In the real world, a social dilemma often takes the form of one or several individuals attempting to benefit from government services, for which they then attempt not to pay, or attempting to avoid responsibility for certain indirect costs of their actions, such as environmental pollution.
In the prisoner’s dilemma, game theorists imagine a situation in which two criminals are interrogated individually by the police. If one criminal condemns the other, then the condemning criminal goes free, and the condemned receives a ten year jail term. If both stay silent, then they are both charged with minor offenses and spend six months in prison. If both condemn, then both spend five years in prison. In this situation, prisoners working to maximize their personal benefit would both always condemn, even though that represents a sub-optimal solution to the social dilemma, as they would spend a total of ten years, rather than one year, in prison.
The problem illustrated by this approach to a social dilemma emerges clearly when concrete issues are examined. It is in everyone’s narrow interest to avoid paying taxes and to receive benefits from the government. If everyone somehow avoided paying taxes, the outcome for society would be dire. Were everyone to pay taxes reliably and honestly, the overall efficiency of government would improve, fewer resources would be wasted on tax collection, and the total net tax burden imposed on society would decrease.
A second game theory puzzle, the tragedy of the commons, illustrates the problem of social dilemmas in the real world even more clearly. In this game, each participant has access to a private resource but also to a public shared resource. A purely self-interested participant will derive maximum value from the shared resource, even to the point of damaging it, before drawing on a private resource, a process that eventually leads to worse outcomes for all. The overuse of public land, air, and water resources is sometimes cited as a real-world version of this social dilemma. Individuals acting rationally place unsustainable demands on resources and damage their ability to produce in future.
Attempts to escape social dilemmas typically focus on ways to identify situations where social behavior would provide great benefits to all participants and making them aware of that fact. A modified version of the prisoner’s dilemma, in which the same two people play the game over and over, leads to more cooperative strategies.