GameStop and the Prisoner’s Dilemma — Sell or Hold?

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In all of game theory, there is perhaps no experiment more popular and more often retold than the prisoner’s dilemma.

Developed by Merrill Flood and Melvin Dresher at RAND Corporation in 1950, it poses the following problem:

Two members of a criminal gang are arrested and imprisoned.

Each prisoner is in solitary confinement with no means of communicating with the other.

The prosecutors lack sufficient evidence to convict the pair on the principal charge, but they have enough to convict both on a lesser charge.

Simultaneously, the prosecutors offer each prisoner a bargain. Each prisoner is given the opportunity either to betray the other by testifying that the other committed the crime, or to cooperate with the other by remaining silent.

The possible outcomes are:

• If A and B each betray the other, each of them serves two years in prison
• If A betrays B but B…