Prisoner's dilemma

A friend sent me a link to an article about peak oil, which said:

.. it is not hard to figure out what would happen when the government gets around to prioritizing uses.

Food production and distribution would come first, then public health (clean water, sewage, sanitation, medical services), then public safety including the armed forces, and finally some level of economic activity that uses petroleum products.

Suppose there are two countries (call them, say, China and Russia). One has lots of people, one has lots of oil resources. Suppose that if they pool their resources, only 20% of the people in both countries die, but if they fight then 25% of the people in both countries die. However, if they fight, let us say that one wins, the other loses and 10% of the people of the winning country die, with the rest in the losing country.

This is the Prisoner's dilemma at the country level -- they are both better off if they cooperate, but each better off if they defect first. The individuals in the country though, have a much better chance of surviving if their countries defect.

Of course, the political situation isn't that simple: if China were to attack Russia, Europe would perhaps get involved, for example. Also, the first targets would not be the industralized countries (which have armies with teeth), but the African ones that have oil, but not big armies. In any case, the US would get involved and sooner rather than later. The military needs oil to fight, so we would need to lock up a supply for ourselves early on or be rendered a toothless tiger (a motivation for invading Iraq that no one has suggested).

I suspect the order of priorities would (will?) be 1. military 2. food 3. vital services (e.g. water) and then everything else.