A situation in which both players can adopt moves such that each player's move is its most profitable response to the move of the other is the
A)prisoner's dilemma.
B)Nash equilibrium.
C)maximin criterion.
D)tacit collusion.

Question

Quizplus · Accepted Answer

A situation in which both players can adopt moves such that each player's move is its most profitable response to the move of the other is the Nash equilibrium. This is because neither player has an incentive to change their strategy, as doing so would result in a less profitable outcome. The prisoner's dilemma involves a situation where both players have an incentive to defect, while the maximin criterion involves choosing the strategy that maximizes the worst-case outcome. Tacit collusion involves implicit agreement between firms to coordinate their actions, which is not the same as an equilibrium in a game.

A Situation in Which Both Players Can Adopt Moves Such