Prisoner’s Dilemma and the Temptation to Defect: What It Says About Workplace Trust

In a perfect world, trust would be the default. But we don’t live in a perfect world. We live in one where people promise partnership and cooperation, then turn around and pull the rug out from under you. That might sound cynical, but if you’ve ever participated in a Prisoner’s Dilemma negotiation, you know exactly what I’m talking about.

Let me walk you through it.

The Exercise That Hit Too Close to Home

As part of my Advocacy course, we dove into negotiation simulations. One of them was the infamous Prisoner’s Dilemma, a classic game theory scenario used to test cooperation and competition. The setup is simple: two players, two choices. You can either cooperate or defect. If both cooperate, you get a decent reward. If one defects while the other cooperates, the defector gets a big win while the cooperator loses out. If both defect, the outcome is worse for both.

The dilemma? Trusting the other party means you’re putting yourself at risk. And yet, if both of you take that leap, the outcome is better than the scorched earth that follows a mutual betrayal.

Sounds like corporate life, doesn’t it?

Cooperation Isn’t Natural — It’s a Choice

What struck me most about this exercise was how quickly people abandoned collaboration. Even when they walked in saying they valued teamwork and transparency, those ideals faded fast the moment they suspected the other person might take advantage of them.

That’s the core of the dilemma: not just fear of loss, but fear of being the fool. And in the workplace, especially in legal and compliance environments, that fear often drives decision-making more than logic or policy ever could.

During the exercise, I observed two students who had a clear shot at a mutually beneficial result. They had rapport. They made eye contact. They nodded in agreement. But when it came time to reveal their decisions? Boom. One cooperated. The other defected. You could see the disappointment register on both faces. The cooperator felt betrayed. The defector looked defensive. Both felt uneasy.

No matter how much we prepare or strategize, trust always involves risk. And some folks just aren’t willing to roll those dice.

What This Reveals About Workplaces

So how does this simulation mirror our actual work environments? Let me count the ways:

• Fear trumps logic: Even when the math favors cooperation, people often default to self-preservation.

• Broken trust lingers: One betrayal can sour future negotiations. Once someone feels burned, good luck getting them to the table again.

• People remember how they felt, not what they gained: That moment of perceived betrayal carries more emotional weight than the numbers ever will.

Let’s say you’re leading a project and you have to share budget with another team. You come in with open communication, try to align on goals, and even suggest cost-saving strategies. But instead of meeting you halfway, they grab the lion’s share of the funding and leave your team scrambling. Next time? You’re not sharing anything until it’s signed, sealed, and approved in triplicate. That’s the Prisoner’s Dilemma in action.

The Cost of Chronic Defection

Defection may win you a round, but it rarely wins the whole game. That’s because every negotiation lives in a larger ecosystem of relationships. Once you burn someone, they remember. And in Legal Operations, where relationships across departments and firms matter more than ever, trust is currency. Lose it, and you’re bankrupt.

I’ve worked with teams who took pride in "playing hardball." They got short-term wins, sure. But over time, vendors stopped offering them their best terms. Other departments resisted cross-functional collaboration. Even their own team members stopped speaking up, fearing retaliation or dismissal.

That’s not strategy. That’s sabotage.

Building a Culture of Strategic Trust

The alternative to defection isn’t blind trust. It’s strategic trust. It means:

• Laying clear expectations upfront: So everyone knows the rules of engagement.

• Documenting decisions: Transparency creates accountability.

• Creating space for debriefs: To learn what worked and what didn’t.

• Holding people to their word: Without dragging them through shame or punishment.

One of the most impactful things I saw during our course was how structured feedback after the negotiation shifted perspectives. When people were invited to name what worked and what didn’t in a safe environment, it reduced defensiveness. More importantly, it created room for growth.

A Word on Legal Ops and Negotiation Culture

In Legal Ops, the stakes of miscommunication are high. One poorly managed negotiation can blow a budget, stall a project, or even expose the company to legal risk. We’re not just administrators. We are operational diplomats. We have to understand process, policy, and people.

And people — well, people are messy. They come with ego, history, trauma, ambition, and fear. Your approach to negotiation has to account for that.

That’s where training exercises like the Prisoner’s Dilemma aren’t just useful. They’re essential. They provide a controlled environment to make mistakes and learn from them before real-world consequences hit.

So, What Do You Do With This?

If you’re in a role where negotiation is part of your world — whether that’s contracts, staffing, project alignment, or even trying to get buy-in from leadership — here’s what I’d recommend:

Run the Dilemma with your team: Use it as a training exercise. See how people respond. Then debrief.

Track trust: Seriously. Keep a pulse on which teams and vendors operate from a foundation of cooperation and which ones don’t. Patterns matter.

Debrief even small negotiations: What worked? What didn’t? What would you do differently next time?

Build guardrails: Not walls. Guardrails. They keep everyone on the path without blocking progress.

Final Thought

The Prisoner’s Dilemma isn’t just a theoretical puzzle. It’s a mirror. One that reflects how we behave when faced with risk, ego, and the chance to win big at someone else’s expense.

Trust is risky. But calculated trust — with preparation, boundaries, and a willingness to learn — is what makes great negotiations possible.

Next time you’re at the table, ask yourself this: Am I playing to win just this deal? Or am I playing for the kind of reputation that earns me a seat at the next one?

Because in the long game of work, reputation is everything.