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The red‐blue exercise is an example of an iterated prisoner’s dilemma (IPD) and is commonly used in educational and training settings to help participants to develop skills in conflict management, negotiation, and inter‐group dynamics. In this paper, it is argued that the exercise is poorly suited to these learning tasks. However, the exercise does provide a powerful yet manageable example of a complex system in action. A systems analysis is offered that both demonstrates why red‐blue is unsuitable when used primarily for personal development training and shows how it may be used as an educational tool to introduce the subject of complex systems.

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