Compare and contrast the prisoners’ dilemma and the oligopolists’ dilemma.
What will be an ideal response?
Both are games involving strategic interaction and anticipating the moves of rivals
in an uncertain environment. Both involve decisions designed to minimize potential
losses when mutual distrust exists. Both have a dominant strategy that will be optimal
regardless of opponents’ actions. The prisoners’ dilemma revolves around a decision whether or not to confess, while the oligopolists’ dilemma revolves around deciding
whether or not to cooperate with a competitor. In both cases, pursuing dominant
strategies results in non-cooperation and makes everyone worse off. The prisoners
would have both been better off if they had both remained silent. However, neither one
trusts the other enough to take this course of action. Likewise, when each oligopolist
independently pursues his or her own self-interest, the two firms reach an outcome that
is worse for both of them. Overall, both the prisoners’ dilemma and the oligopolists’
dilemma both show the conflict between group rationality and individual rationality.
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The term after the bell means after the closing of the stock market
Indicate whether the statement is true or false
When total utility is at a maximum, marginal utility is zero.
a. true b. false
If the average productivity of Canadian firms is rising more quickly than the average productivity of Indian firms, which of the following would you expect to see?
A) an increase in the value of the rupee relative to the dollar B) a decrease in the prices of Indian products C) a decrease in the quantity demanded of Indian products relative to Canadian products D) an increase in the quantity demanded of Indian products relative to Canadian products
Table 21.4Output (Units per Day)Total Cost (Dollars per Day)016130242358478At 3 units of output in Table 21.4, average fixed costs are
A. $16.00. B. $15.50. C. $19.50. D. $5.33.