The strategy profile in which both players remain silent in the Prisoners' Dilemma can be described as:
a. non-Pareto optimal and unstable.
b. Pareto optimal and unstable.
c. non-Pareto optimal and stable.
d. Pareto optimal and stable.
b
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Refer to Scenario 17.3. Moral hazard would be eliminated in this situation if
A) the insurer would always charge $300. B) the insurer would always charge $6000. C) the insurer could costlessly monitor whether a fire prevention program has been implemented, and adjust the premium upward if it is not. D) the insurer could costlessly monitor whether a fire prevention program has been implemented, and adjust the premium downward if it is not. E) the fire did not occur.
In the 1990s, many people had rising incomes. At the same time, there was a rise in cost of wood. Holding other factors constant, the demand for houses_________ and the supply for houses_________
a. Increase, increase b. Increase, decrease c. Decrease, increase d. Decrease, decrease
Public goods tend to be undersupplied through the market since it is difficult for potential suppliers to withhold such goods from nonpaying consumers; the government can use taxes to overcome this problem of nonpayment
a. True b. False Indicate whether the statement is true or false
Why do booms and recessions tend to be transmitted across national borders?