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The prisoners’ dilemma is a two-person game illustrating that a. the cooperative outcome could be worse for both people than the Nash equilibrium. b. even if the cooperative outcome is better than the Nash equilibrium for one person, it might be worse for the other. c. even if cooperation is better than the Nash equilibrium, each person might have an incentive not to cooperate. d. rational, self-interested individuals will naturally avoid the Nash equilibrium because it is worse for both of them.

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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050
BuyFind

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781305156050

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Chapter
Section
Chapter 17, Problem 5CQQ
Textbook Problem

The prisoners’ dilemma is a two-person game illustrating that

a. the cooperative outcome could be worse for both people than the Nash equilibrium.

b. even if the cooperative outcome is better than the Nash equilibrium for one person, it might be worse for the other.

c. even if cooperation is better than the Nash equilibrium, each person might have an incentive not to cooperate.

d. rational, self-interested individuals will naturally avoid the Nash equilibrium because it is worse for both of them.

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