Prisoner’s Dilemma is a game theory that explains why individuals may not cooperate even if it is in their best interest. The Eurozone crisis demonstrates difficulties of cooperation within the European Union (EU) as member states sometimes pursue their own national interests at the detriment of the collective interest. The concept of Prisoner’s Dilemma illuminates why member states fail to cooperate in the short run, but cooperation prevails in the long run as Prisoner’s Dilemma transcends to the Stag Hare dilemma. The Prisoner’s Dilemma matrix has been used to analyze the choices Germany, France, Italy, Spain, and Greece could have made in response to the Eurozone crisis, and how the logic of game theory explains the lack of collaboration between member states in resolving the crisis. The comparison of the suggested strategy of Prisoner’s dilemma and the actions that these member states have undertaken in the last three years validates the applicability of Prisoner’s Dilemma to collaboration issues in the Eurozone crisis. Understanding Prisoner’s Dilemma of the EU can be used outside the EU experience to analyze and predict short and long term behavior of states, members of economic and political union, that struggle to coordinate national and collective interest.

Prisoner’s Dilemma of the European Union