The prisoners' dilemma shows that the players' dominant strategies often lead them to less than optimal outcomes. Is there any way in which this will not be the case?
What will be an ideal response?
Yes. If the game is played over and over, firms (or individuals) may learn from one another. If the player uses a tit-for-tat strategy, an optimal outcome can be achieved.
You might also like to view...
If money demand does not depend upon income, then
a. monetary policy cannot have any effect upon the economy. b. monetary policy will only affect the level of the price level. c. monetary policy will only affect interest rates. d. monetary policy will have a larger impact on income.
If the measured elasticity of supply coefficient equals 1.3, then supply is: a. perfectly elastic. b. elastic
c. unit elastic. d. inelastic.
Monopolistic competition is a market structure in which
A) firms produce and sell products for which there are no close substitutes. B) the demand curve for a typical firm is horizontal. C) firms cannot influence the market price. D) barriers to entry are low.
A consumer purchases a book by driving across town to a bookstore, standing in line for five minutes to pay the cashier, and then pays $5. The same book is purchased by another consumer who spends 2 minutes placing the order over the Internet for $10. The book necessarily cost the first consumer less
Indicate whether the statement is true or false