- If A cooperates and B cooperates, A and B each receive medium payoffs.
- If A cooperates and B defects, A receives a horribly low payoff and B receives a huge payoff.
- Similarly, if B cooperates and A defects, B receives a horribly low payoff and A receives a huge payoff.
- If A and B defect, A and B each receive low (but not horribly low) payoffs.

The Prisoner's Dilemma applies to P2P transactions in a limited way, if you consider the payoff to be the difference between downloads (positive) and uploads (negative). Assume A and B are two peers who wish to download something of equal value, normalized to be 1, that the other has (and everything's legal, yahda yahda yahda).

- If A uploads what B wants and B uploads what A wants, A and B both upload (-1) and download (1), so the payoff for each is 0.
- If A uploads what B wants and B does not upload, then A ends up with a payoff of -1, and B ends up with a payoff of 1.
- If A does not upload and B uploads what A wants, then A ends up with a payoff of 1, and B ends up with a payoff -1.
- If A does not upload and B does not upload, then no transaction occurs at all, so the payoff is 0.

- A and B both have what they wanted, in addition to what they uploaded, so each have a payoff of 1.
- A did not get what it wanted, but B did, so A's payoff is 0 and B's payoff is 1.
- A got what it wanted, but B did not, so A's payoff is 1 and B's payoff is 0.
- A and B both got nothing, a payoff of 0.

Nevertheless, the Prisoner's Dilemma shows that, assuming uploading or sharing has a cost, "leeches" are merely acting in a rational manner to maximize their individual payoff. So P2P systems that make it more rational, or even mandatory, to share stand a better chance of thriving. Specifically, if a peer downloads more than one item, the iterated or repeating Prisoner's Dilemma can come into play. A peer that acted as a leech for the last item could have some sort of penalty applied for the next item the peer downloads. Through this simple mechanism, known as Tit-for-Tat, cooperation becomes more attractive. Call it filesharing karma, only with a succession of files instead of lives. Any peer downloading its very last item would rationally defect on that item, because there would be no chance to receive a future penalty.

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