Asked by Kunwar Singh on May 10, 2024
Verified
Which one of the following is a way to get out of a repeated Prisoner's Dilemma Nash Equilibrium?
A) Be envious
B) Try to decrease your competitor's pie while increasing your own
C) Do not be envious-focus on your slice of the profit pie
D) All of the above
Prisoner's Dilemma
A paradox in decision analysis in which two individuals acting in their own self-interest pursue a course of action that does not result in the ideal outcome.
Nash Equilibrium
A concept in game theory where no player can benefit by changing strategies while the other players' strategies remain unchanged.
Competitor's Pie
A metaphorical representation of the total market share or demand available to all competitors within a market.
- Analyze strategic interactions in repeated and simultaneous-move games.
- Recognize the role and strategies of tit-for-tat in repeated games.
Verified Answer
TZ
Thalia ZunigaMay 14, 2024
Final Answer :
C
Explanation :
The best choice is to not be envious and to focus on your own slice of the profit pie. This means cooperating with your competitor and striving for a mutually beneficial outcome. By doing so, you may be able to build trust and establish a new equilibrium that is more favorable for both parties. Trying to decrease your competitor's pie while increasing your own (option B) is not a sustainable solution as it could lead to retaliation and an endless cycle of tit-for-tat behavior. Being envious (option A) is also not a productive approach as it can lead to short-term gains but can ultimately harm both parties in the long run.
Learning Objectives
- Analyze strategic interactions in repeated and simultaneous-move games.
- Recognize the role and strategies of tit-for-tat in repeated games.