Leadership scenarios in prisoner's dilemma game

Abstract: The prisoner's dilemma game is the most known contribution of game theory into social sciences. Here we describe new implications of this game for transactional and transformative leadership. While the autocratic (Stackelberg's) leadership is inefficient for this game, we discuss a Pareto-optimal scenario, where the leader L commits to react probabilistically to pure strategies of the follower F, which is free to make the first move. Offering F to resolve the dilemma, L is able to get a larger average pay-off. The exploitation can be stabilized via repeated interaction of L and F, and turns to be more stable than the egalitarian regime, where the pay-offs of L and F are equal. The total (summary) pay-off of the exploiting regime is never larger than in the egalitarian case. We discuss applications of this solution to a soft method of fighting corruption and to modeling the Machiavellian leadership. Whenever the defection benefit is large, the optimal strategies of F are mixed, while the summary pay-off is maximal. One mechanism for sustaining this solution is that L recognizes intentions of F.