Haha i think the best thing i have learnt from econs these 2 yrs has gotta be the prisoners' dilemma...

Imagine there are 2 ppl, A and B, being interrogated for a crime. They are held in separate rooms and have no contact with one another. Then they are each told the same thing

"If you and your partner both do not confess, you 2 will get 1 yr each in jail. If you confess but your partner does not, you will get 3 months in jail while your partner gets 10 yrs in jail and vice versa. If both you and your partner confess, both of you will get 3 yrs each in jail."

So upon hearing this from the police, what will A and B do?

The best alternative of course would be for them both not to confess so that they will each get the jail term of 1 yr. However, both of them know that if they did not confess while their partner did, they would get 10 yrs in jail while their partner would only get 3 months. Thus, both of them, looking after their own interests, would actually confess together and each get 3 yrs in jail. Of coz this is a worse position if they both had not confessed and gotten a 1 yr jail term instead. If they knew each other well enough such that they would not confess under any circumstances, they would have been in a better position. However, thinking of themselves will only lead to both suffering more.

Thus this is prisoners' dilemma: how 2 ppl, while attempting independently to make their optimal decision based on the assumptions of how the other are likely to act, end up in a worse position than before...

Even if those of u who read this are not econs students, i hope it would have generated some interest in u...haha...