Cold War Prisoner’s Dilemma
https://www.baselpeaceoffice.org/sites/default/files/imce/articles/News/nuclear_prisoners_dillemma.pdf
One very interesting application of the prisoner’s dilemma is the relationship between the USSR and the United States during the cold war. The first application of the prisoner’s dilemma occurs in the decision on each government of whether they would like to stockpile nuclear weapons. Both governments have the option to build or not build nuclear weapons. According to the article linked above, the preferences of the US follow, their first preference is to build nuclear weapons and have the USSR not build them. Following that they would prefer both not building, both building, and lastly the USSR building nuclear weapons but the US not. The preferences for the USSR is the same, so the problem is symmetric. Therefore, the dominant strategy for both nations is to stockpile nuclear weapons, which leads to the cold war.
However, one interesting thing to note is to consider the case where both countries cooperate and agree to not build nuclear weapons. In terms of preferences, both countries would have obtained the payoff of their second highest preference, a very good situation for both parties involved. This actually would be the best “win-win” strategy. However, the fact that the least preferred choice for all countries is to not have nuclear weapons and have the other country have nuclear weapons, the dominant strategy is still to build nuclear weapons. Therefore, this international cooperation is unrealistic from a game theory perspective. Combine this with the real-world distrust between the two countries during this time and it is apparent why the tensions during the cold war existed.