Explain the difference between a cooperative equilibrium and a noncooperative equilibrium in game theory
What will be an ideal response?
A cooperative equilibrium is one in which players in a game cooperate to increase their mutual payoff. A noncooperative equilibrium is one in which players don't cooperate but pursue their own self-interest.
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When the economy suffers a permanent negative supply shock and the central bank responds by changing the autonomous component of monetary policy to keep inflation at the target inflation rate, then
A) aggregate demand curve shifts leftward. B) aggregate demand curve shifts rightward. C) output will be unchanged. D) both A and C.
Crowding-out is eliminated when the LM curve is ________, so that expansionary fiscal policy ________ the interest rate
A) vertical, does not affect B) vertical, raises C) horizontal, does not affect D) horizontal, raises