Stanford Progressive: A prisoner's dilemma in financial compensation

http://progressive.stanford.edu/cgi-bin/article.php?article_id=335

This month's article in the Stanford Progress applies the prisoner's dilemma game theory towards compensation cuts in a work environment.

The cooperative strategy would be keeping compensation, but because of the incentive to maximize profits, the rationale choice is to cut compensation. This is compared to the no confessing strategy as this cooperative strategy would benefit both parties.

Though, in this state of times, it has come down to a point that you have to accept these cuts because you either get paid or not paid.