A "prisoner's dilemma" can arise when:
A) two large countries simultaneously and independently apply tariffs on imports from each other.
B) two large countries simultaneously and independently eliminate tariffs on imports from each other.
C) one large country eliminates tariffs on imports from another large country.
D) one small country eliminates tariffs on imports from a large country.

Question

Quizplus · Accepted Answer

The prisoner's dilemma is a situation in game theory where two individuals might not cooperate, even if it appears that it is in their best interest to do so. In this case, if two large countries simultaneously and independently apply tariffs on imports from each other, it would create a situation where both countries may feel that it is in their best interest to protect their domestic industries, but doing so would result in a lose-lose situation where both countries end up worse off than if they had cooperated and not imposed tariffs. This scenario is a classic example of the prisoner's dilemma.

A "Prisoner's Dilemma" Can Arise When