The dilemma has the following typical structure. Thus taking defection is a rational behavior of each individual. If all individuals take defection, however, all of them are worse off than in the case where all take cooperation. Therefore the prisoner's dilemma shows individuals' rational behavior can induce a socially undesirable outcome. In this paper, we examine whether an agreement to cooperate is obeyed when no institution for enforcement exists.
Individuals can negotiate and reach an agreement if they wish.
Though it was defined as a solution in characteristic function form cooperative games, von Neumann and Morgenstern defined the notion also in a wider class of games. Chwe incorporated a sequence of moves into the definition of stable set. We call it a farsighted stable set. He defined another solution that he called a consistent set. The notion is very similar to the farsighted stable set.