Cooperation in the Trenches
From Browning and Zupan's microeconomics textbook:
"The situation along the Western Front of World War I can be represented as a repeated-game prisoner's dilemma. In any given locality, opposing units could either "cheat" (shoot to kill) or "cooperate" (withhold fire or shoot in such a way as to miss). Cheating was the dominant strategy for both sides. This is so because weakening the enemy through cheating increased the cheating side's chances of survival. Cheating by both sides however, resulted in an outcome--heavy losses inflicted on both sides for little or no gain--that was inferior to the one produced by cooperation. And opposing units interacted with each other for what appeared, at least to them, indefinite periods of time.
The diaries, letters, and reminiscences of the trench fighters testify to the "life-and-let-live" (that is, cooperation) equilibrium that eventually emerged. One British staff officer touring the trenches was "astonished to observe German soldiers walking about within rifle range behind their own lines. Our men appear to take no notice." A soldier commented: "It would be child's play to shell the road behind the enemy's trenches, crowded as it must be with the ration wagons and water carts, into a bloodstained wilderness...but on the whole there is silence. After all, if you prevent your enemy from drawing his rations, his remedy is simple: he will prevent you from drawing yours." Another British officer recounted: "I was having tea with A Company when...suddenly, a [German] salvo arrived but did no damage. Naturally, both sides got down and our men started swearing at the Germans, when all at once a brave German got on to his parapet and shouted out "We are very sorry about that; we hope no one was hurt. It is not our fault, it is that damned Prussian artillery [behind the front lines]"
Believing that tacit truces would undermine troop morale, the high commands of both sides began rotating troops and ordering raids (whose success or failure could be monitored by the headquarters staff) in an effort to destroy the "live-and-let live" system."