In class we talked about the prisoner’s dilemma, and how it achieves a completely undesirable Pareto-inefficient outcome by way of a dominant strategy. After our class, I had around an hour to go back to my apartment and make lunch before heading back out to my next class. I had decided to drive that morning, so I got in my car and quickly took off, hoping to efficiently allocate my time. Instead, I found myself in bumper to bumper traffic for the next 20 minutes. What could have easily been a 15 minute stroll on a beautiful day turned into 20 minutes of me angrily glaring at the rearview mirror, wishing I had just walked.
Everyone on the roads wants to arrive at their destination as soon as possible, and since driving is faster than walking, the dominant strategy for everyone is to drive. However when enough people choose the dominant strategy and drive, a Pareto-inefficiency is created where any one driver could improve everyone’s utility by choosing to walk.
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