Question

A prisoner's dilemma exists when

	1.	there are no benefits at all from any strategy.
	2.	all but one party is worse off.
	3.	all parties are as well off as possible.
	4.	all parties are worse off than would be the case if the parties could agree to another set of behaviors.

Answer 1

A prisoner's dilemma is a situation where two individuals involved in making a decision that affects both the parties end up acting in 'self interest' that hampers the gain of both the individuals as compared to the situation if they had been successful in making a mutual decision by cooperating with each other.

That is, another beheviour pattern would have made both better off than the act of self interest motive at the cost of other party.

Thus, the coorect answer is option 4. all parties are worse off than would be the case if the parties could agree to another set of behaviors