A strategic interaction in which two players both gain individually by not cooperating, leading to a Nash equilibrium in which both are worse off than if they cooperated. Important especially for explaining why countries may choose protection even though all lose as a result. See tariff-and-retaliation game.
A situation in which two persons (or firms) would both do better to cooperate than not to cooperate, but in which each feels it is in his or her interests not to do so; therefore each fares worse than if they cooperated.
A game between two prisoners that shows why it is hard to cooperate, even when it would be beneficial to both players to do so. (p. 353)