This prisoner's dilemma game shows the payoffs associated with two firms, A and B, in an oligopoly and their choices to either collude with one another or not.
Given the payoffs in the matrix shown, Firm B:
A. should always choose to collude, regardless of Firm A's actions.
B. should always choose to compete, regardless of Firm A's actions.
C. should compete if Firm A colludes and collude if Firm A competes.
D. should compete if Firm A competes and collude if Firm A colludes.
Answer: B
You might also like to view...
The conviction that the poor are shunning job vacancies is lessening over time
Indicate whether the statement is true or false
A technological breakthroughs in the production of computers creates a __________ and causes the price of computers to __________.
a. leftward shift of supply, rise b. rightward shift of supply, fall c. rightward shift of demand, rise Incorrect. Please review Top Ten Concept # 3. d. rightward shift of supply, rise e. leftward shift of demand, rise
A game in which the first player has the power to confront the second player with a take-it-or-leave-it offer is the:
A. repeated prisoner's dilemma. B. ultimatum bargaining game. C. matching pennies game. D. Nash bargaining game.
Many people believe that pure monopolies charge any price they want to without affecting sales. Instead, the output level for a profit-maximizing pure monopoly occurs where ________.
A. marginal cost equals average revenue B. average total cost equals average revenue C. marginal revenue equals average cost D. marginal revenue equals marginal cost