A series of escalating mutually-offsetting investments designed to enhance performance is a(n)
A) positional externality.
B) prisoner's dilemma.
C) external benefit.
D) positional arms race.
E) example of the Coase theorem.

Question

Quizplus · Accepted Answer

A series of escalating mutually-offsetting investments designed to enhance performance is called a positional arms race. This occurs when competitors in a market continuously increase their investments to try to gain an advantage over each other, resulting in a cycle of investments that may not necessarily lead to improved outcomes for society as a whole.

A Series of Escalating Mutually-Offsetting Investments Designed to Enhance Performance