Games with Dominant Strategy Equilibrium

Example - Prisoner's Dilemma
In this example, two people A and B, who are suspected of committing a crime together, are being questioned separately. They can choose to confess (strategy C) or deny (strategy D). The payoffs are as follows: If they both confess, they will each receive a moderate sentence. [1] If they stand firm and both deny, there is insufficient evidence for a full conviction, so they will each receive a light sentence. [2] If one denies while the other confesses, the one who denies will receive a heavy sentence and the other will be set free for providing evidence against the other. [3] The dilemma is whether an individual prisoner should confess or deny. As before, if we consider Prisoner A: If B chooses C, [4] then A has a higher payoff with C. [5] If B chooses D, [6] then A has a higher payoff with C. [7] Thus, C is a dominant strategy for A, and, by symmetry, also a dominant strategy for B. This leads to a dominant strategy equilibrium at (C, C). [8]
Analysis Again, we find that the players choose an inferior strategy because they are not co-operating and do not trust each other.

Example - Prisoner's Dilemma