When modeling an oligopoly as a prisoners dilemma problem an agreement is a Nash equilibrium if
A)if it allows at least one party to cheat
B)if it is not a illegal
C)it is self enforcing
D)both parties are allowed to cheat

Question

Quizplus · Accepted Answer

In order for an agreement to be a Nash equilibrium, it must be self-enforcing. This means that neither party has an incentive to deviate from the agreement, even if the other party deviates. If the agreement is not self-enforcing, then it is not a stable equilibrium and will eventually break down. Cheating may or may not be allowed, depending on the specific situation, but it is not a necessary condition for an agreement to be a Nash equilibrium. Likewise, legality is irrelevant to the concept of Nash equilibrium.

When Modeling an Oligopoly as a Prisoners Dilemma Problem an Agreement