1. A prisoner\'s dilemma occurs when: A. each player has a dominant strategy, an
ID: 1227047 • Letter: 1
Question
1. A prisoner's dilemma occurs when:
A. each player has a dominant strategy, and the payo to each player is larger than what it would
be if each had chosen a dominated strategy
B. each player has a dominant strategy, and the payo to each player is smaller than what it
would be if each had chosen a dominated strategy
C. no player has a dominant strategy and the payo is as large as possible
D. each player would like to choose a moral strategy, but is coerced into choosing to do something
illegal
2. In game theory, a choice that is optimal for a rm no matter what its competitors do is referred to as:
A. a dominant strategy
B. a game-winning strategy
C. a super optimality
D. a dominated strategy
Explanation / Answer
1. A prisoner's dilemma occurs when each player has a dominant strategy, and the payo to each player is smaller than what it would be if each had chosen a dominated strategy.
This is because in case of Prisoner's dilemma, players chooses a strategy which is not their optimal choice. This is because if both chooses their best strategies then both player has to suffer. So, they chooses a strategy where they can suffer less than their optimal choice.
2. In game theory, a choice that is optimal for a firm no matter what its competitors do is referred to as
a dominant strategy. This is because a dominant strategy means the player will choose his optimal strategy regardless the choice of other to gain more.
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