Ben and Sam are competing for the remaining spot on the national swim team.If one of these two swimmers hires a personal trainer,that swimmer will win the spot.If both swimmers hire a personal trainer,they have a 50% chance of winning the place on the team;if neither swimmer hires a personal trainer,they still have a 50% chance of winning the place.The table below shows the payoff matrix facing the swimmers.Whoever makes the team will earn $100,000 next year from product endorsements.
-Refer to the information above.As a result of the positional externality in this game,
A) both swimmers are worse off.
B) Ben is better off,but Sam is worse off.
C) Sam is better off,but Ben is worse off.
D) both swimmers are better off.
E) both swimmers are neither worse off nor better off.

Question

Ben and Sam are competing for the remaining spot on the national swim team.If one of these two swimmers hires a personal trainer,that swimmer will win the spot.If both swimmers hire a personal trainer,they have a 50% chance of winning the place on the team;if neither swimmer hires a personal trainer,they still have a 50% chance of winning the place.The table below shows the payoff matrix facing the swimmers.Whoever makes the team will earn $100,000 next year from product endorsements. 
-Refer to the information above.As a result of the positional externality in this game,
A) both swimmers are worse off. 
B) Ben is better off,but Sam is worse off. 
C) Sam is better off,but Ben is worse off. 
D) both swimmers are better off. 
E) both swimmers are neither worse off nor better off.

Quizplus · Accepted Answer

The positional externality in this game means that each swimmer's payoff depends on the position they finish in. In this case, Ben is better off if he finishes first, and Sam is worse off if he finishes second. Therefore, both swimmers are worse off as a result of the positional externality.

Ben and Sam Are Competing for the Remaining Spot on the National