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Squid Game and Economics: What Netflix's Biggest Show Can Teach Us About Economics

When you all hear the phrase "the biggest show on Netflix", what shows come to mind? You might be thinking of Stranger Things, Suits, or Wednesday, all of which are hit shows in their own right, but — and this answer may be a bit surprising — Netflix's biggest show is actually Squid Game. That's right — the dystopian, Korean-produced show where extremely affluent people round up 456 impoverished people in order to watch them fight to the death for a cash prize through a series of games. In my humble opinion, the show was incredible. From the conflict between Gi-Hun and Sang-Woo to the plot twists, this show kept me on the edge of my seat and was a great watch overall (and if you somehow have not watched it yet, I highly recommend doing so). However, although Squid Game has a lot to say about society and capitalism, it also has equally as much to say about economics, specifically the Prisoner's Dilemma.

In order to better understand what the Prisoner's Dilemma is, we first have to understand its broader context. The Prisoner's Dilemma is a part of game theory, which is the science of decision-making and how people's decisions are made or affected by the decisions of the people around them.

Going off that note, the Prisoner's Dilemma is actually pretty simple. It says that when two people are faced with the choice to either cooperate with each other or help themselves at the expense of the other person, most people will likely look out for their own self interests and choose the second option, even if cooperating will give them the best outcome.

The Prisoner's Dilemma is ultimately a part of the framework of Game Theory

To make it a little clearer here's an example: Tom and George are both arrested for breaking and entering. They are separated and unable to communicate with one another, and there are no witnesses. The only way the police can charge them with breaking and entering is if one defects and turns the other person in. Both Tom and George can either cooperate with each other by staying silent or defect and testify against each other. Staying silent would only yield 2 years of jail time for each person since Tom and George would be convicted of a lesser crime, but testifying against each other would yield 10 years of jail time for each person since they would be convicted of breaking and entering. According to the Prisoner's Dilemma, Tom and George are more likely to testify against each other rather than remaining silent due to their own self-interests, even if staying silent leads to considerably less jail time between the two of them.

A more artistic interpretation of the Prisoner's Dilemma

What does this have to do with Squid Game? This concept is interwoven throughout pretty much the entire show, but I chose the scene below to illustrate this concept. In this scene, the contestants are about to go to sleep. They have the choice to either kill each other while they are sleeping or go to sleep and not fight each other. Even if cooperating leads to a considerably better outcome (nobody dies), the contestants choose to fight and kill each other to better their chances of winning the cash prize, an action done purely out of self-interest.

Warning: This clip contains mature themes, violence and gore.

Squid Game was already a pretty depressing show, so I guess it's no surprise that it also encompasses some very depressing economic concepts as well. Although it seems pretty surface-level, Netflix's biggest show sure has a lot to unpack, and not all of it is exactly uplifting. Either way, I'm still very excited for season 2 of Squid Game, and you can bet that I'll be binging it whenever it comes out.


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