Principles Of Microeconomics 2e
2nd Edition
ISBN: 9781680922219
Author: Timothy Taylor, Steven A Greenlaw, David Shapiro
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 10, Problem 12RQ
Does each individual in a prisoner’s dilemma benefit more from cooperation or from pursuing self-interest? Explain briefly.
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Does each individual in a prisoner’s dilemma benefit more from cooperation or from pursuing selfinterest? Explain briefly
Which of the following is true of a prisoner's dilemma?
Players will be best off if they cooperate, but they have an incentive to follow their individual self-interest.
Players will be best off if they cooperate, and they will have enough incentive to do so.
Players will be best off if they follow their individual self-interest, but they have an incentive to cooperate.
Players will have no incentive to take any particular action.
Why is a cooperative outcome more likely in an often repeated prisoners’ dilemma?
Chapter 10 Solutions
Principles Of Microeconomics 2e
Ch. 10 - Suppose that, due to a successful advertising...Ch. 10 - Continuing with the scenario in question 1, in the...Ch. 10 - Consider the curve in the figure below, which...Ch. 10 - Sometimes oligopolies in the same industry are...Ch. 10 - What is the relationship between product...Ch. 10 - How is the perceived demand curve for a...Ch. 10 - How does a monopolistic competitor choose its...Ch. 10 - How can a monopolistic competitor tell whether the...Ch. 10 - If the firms in a monopolistically competitive...Ch. 10 - Is a monopolistically competitive firm...
Ch. 10 - Will the firms in an oligopoly act more like a...Ch. 10 - Does each individual in a prisoners dilemma...Ch. 10 - What stops oligopolists from acting together as a...Ch. 10 - Aside from advertising, how can monopolistically...Ch. 10 - Make a case for why monopolistically competitive...Ch. 10 - Would you rather have efficiency or variety? That...Ch. 10 - Would you expect the kinked demand curve to be...Ch. 10 - When OPEC raised the price of oil dramatically in...Ch. 10 - Andreas Day Spa began to offer a relaxing...Ch. 10 - May and Raj me the only two growers who provide...Ch. 10 - Jane and Bill are apprehended for a bank robbery....
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Similar questions
- Come up with a diagram (i.e. using a two-player decision matrix such as the Prisoner’s Dilemma) for an original game theory/prisoner's dilemma scenario (either in business, politics, or your own personal life), and explain what would be the most likely outcome of the scenario you have chosen.arrow_forwardWhich of the following problems makes it difficult to interpret human experiments using cooperation games based on economic game theory? If you compare humans from different cultures, you get different results which defeats the purpose. These games do not test human behavior under conditions that are ecologically realistic. Economic game theory assumes that humans are selfish, but actually we are cooperative. Humans choose to cooperate because they are related.arrow_forwardThe author describes the case of the "Prisoner's Dilemma" to demonstrate which of the following? Competition and the pursuit of unfettered self-interest result in greater efficiency, and benefits everyone involved equally. Effective policy can place incentives in such a manner that the very pursuit of unfettered self-interest of the prisoners results in the desired outcome of getting both to confess to the crime. Just as in the case of the prisoner's dilemma, the pursuit of unfettered self-interest will cause the fishermen who fish Atlantic swordfish (a common resource) to harvest them wisely and limit the number of fish each fisherman catches. Thus the fishermen's ability to pursue unfettered self-interest will allow the population of swordfish to remain stable and even grow. The fishermen trust each other to behave responsibly and in the interest of the common good.arrow_forward
- Suppose two players play the prisoners' dilemma game a finite number of times, both players are rational, and the game is played with complete information, is a tit-for-tat strategy optimal in this case? Explain using your own words.arrow_forwardA "Prisoner's Dilemma" is a situation in which both parties: a) have an incentive to cooperate(meaning working with the other criminal by keeping one's mouth shut) even without communication b) have an incentive to not cooperate(meaning working with other criminal by keeping one's mouth shut) even through cooperation would be mutually benefical. c)have no incentives to cooperate or not cooperate because either way they lose.arrow_forwardEvolutionary game theory provides a framework for understanding the emergence of preferences and behavior. Why are theoretical methodologies that employ the rational actor model an evolutionary stable strategy for economists?arrow_forward
- Define game theory.arrow_forwardTable 15.4, Prisoner Dilemma. Suppose the game starts with both Jesse and Frank planning to “Stay Mum” in the lower right cell. Discuss how each player would evaluate the situation and decide whether to change decisions. If each player makes decisions to minimize the penalty, in which cell will this game end? Is there a Nash equilibrium?arrow_forwardIs the solution to the prisoner’s dilemma game a Nash equilibrium? Why? The solution to the prisoner’s dilemma game is a Nash equilibrium because no player can improve his or her payoff by changing strategy unilaterally. The solution to the prisoner’s dilemma game is not a Nash equilibrium because players do not end up in the best combination for both. The solution to the prisoner’s dilemma game is not a Nash equilibrium because both players can improve their payoffs by cooperating. The solution to the prisoner’s dilemma game is a Nash equilibrium because it is a noncooperative game in which both players have to expect that the other is purely selfish.arrow_forward
- Give two examples of a prisoner's dilemma that involves more than two playersarrow_forwardIn business, sports, politics, and many other fields there are probably countless situations akin to the prisoner's dilemma where players acting in their own self-interest do not produce an ideal outcome. Likewise, some player dynamics also illustrate other game theory concepts like a game of chicken, credible threats/commitments, and other similar concepts. Use at least one article from The Wall Street Journal to discuss a strategic situation between players that resembled or used any of the concepts above. What could have any of the players done differently to achieve a better outcome?arrow_forwardIn game theory, a "payoff matrix" is a table that shows the following, except Multiple Choice the profits to each firm or player that would result from various strategy combinations. the target payoffs that each firm or player is aiming for in their different strategies. the interdependence of the firms’ or players’ profits, based on their alternative actions. the alternative results that the firms or players would get, based on their actions and those of others.arrow_forward
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