Suppose Bob agrees to sell his car to Mary for $5,000.They draw up a contract stating that Mary will pay Bob the money on May 1 and that Bob will give the car to Mary on May 2.In the absence of a court of law,Bob might be tempted to "defect" from the agreement by taking Mary's money and then denying her possession of the car.A court,however,enables Mary to sue Bob if he does not honor his obligations under the contract.The relationship between Bob and Mary is a type of ____________________.

Question

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The situation described is a Prisoner's Dilemma, where both parties have an incentive to defect from the agreement for personal gain, but mutual cooperation would lead to a better outcome for both.

Suppose Bob Agrees to Sell His Car to Mary for $5,000.They