Asked by Elizabeth Barkhudaryan on Jun 19, 2024

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(Consider This) The prisoner's dilemma is generally demonstrated through:

A) the kinked-demand model.
B) game theory.
C) monopolistic competition.
D) a tightly knit cartel.

Prisoner's Dilemma

A fundamental problem in game theory that demonstrates why two rational individuals might not cooperate, even if it appears that it is in their best interest to do so.

Game Theory

A theoretical framework for understanding social situations among competing players and predicting their choices of strategic actions.

Kinked-Demand Model

A model in oligopoly markets where firms face a demand curve with a kink at the current price, illustrating non-responsive demand to price changes by one firm if others do not follow.

  • Understand the prisoner’s dilemma and how it relates to the challenges of cooperation and competition in oligopolies.
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KS
Kishy smithJun 24, 2024
Final Answer :
B
Explanation :
The prisoner's dilemma is a fundamental concept in game theory, which studies strategic decision making. It involves two individuals (prisoners) who are given the option to either cooperate with each other or betray the other person. The optimal outcome for both individuals is to cooperate, but the dominant strategy is to betray the other person, resulting in a worse overall outcome. This dilemma is often used to illustrate why rational individuals may not always make optimal choices in situations where they are interdependent with others.