Nash Equilibrium
Pareto Optimal
Respondent
Claimant
Settle
Litigate
Settle
3, 3
Cooperation
0, 5
Exploitation
Litigate
5, 0
Aggression
1, 1
War
● Claimant● Respondent

Sequential Game Tree

Decision Node
Payoff
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The Strategic Landscape

Employment tribunals often function like a Prisoner's Dilemma. Both parties benefit from cooperation (Settlement), but fear of the other side's aggression drives them towards a suboptimal outcome.

Key Insight: A Nash Equilibrium is where no player regrets their choice given what the other played. It is often not the best collective outcome.
Nash Equilibrium Mutual Litigation
Pareto Optimal Mutual Settlement
Decision Tree Builder → Regret Minimiser →

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Note: These are ordinal preferences, not monetary values. 5 = most preferred, 0 = least preferred. Nash and Pareto markers recalculate automatically.