The solutions to the problems signaled by the analysis of games of plain substitutes and complements:
A)can be found by further pursuing the self- interest of the participating actors.
B)lie in the search for institutions that solve social dilemmas.
C)can always be solved by the government intervention.
D)lie outside the realm of game theory.

Question

Quizplus · Accepted Answer

The analysis of games of plain substitutes and complements usually reveals social dilemmas that require cooperative behavior to achieve optimal solutions. Institutions can be designed to facilitate this cooperative behavior and solve the social dilemma. Self-interest pursuit may not always lead to the optimal outcome, and government intervention may not be necessary or effective in all cases. The solutions can be found within the realm of game theory by identifying the appropriate institutional design.

The Solutions to the Problems Signaled by the Analysis of Games