The dominant strategy in the prisoners' dilemma is for
A) neither player to confess.
B) both players to confess.
C) only the dominant player to confess.
D) the dominant player not to confess.
B
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Van, whose utility of wealth curve is shown in the above figure, owns a home that is valued at $100,000. There is a 10 percent chance that the house will be destroyed by hurricane. The value of insurance to Van is
A) $10,000. B) $15,000. C) $20,000. D) $30,000.
When consumers cannot tell the difference at the time of sale between high-quality products and those with defects, strong sales of the low-quality products will tend to depress price and drive the high-quality products from the market. Economists call this
a. the curse of advertising. b. the imperfect information problem. c. the brand name problem. d. an open-access resource.