In which of the following prisoners' dilemma games is the non-cooperative outcome actually bad for society as well as for the players?
(i) oligopolists try to maintain monopoly profits
(ii) two countries are involved in an arms race
(iii) two oil producers act on their own self-interest when deciding how many wells to dig
A)(i) and (ii)
B)(ii) and (iii)
C)(i) and (iii)
D)(i), (ii) and (iii)

Question

Quizplus · Accepted Answer

In the case of (ii) two countries involved in an arms race, the non-cooperative outcome can lead to an increase in military spending and tension between the countries, which ultimately harms society as a whole. In the case of (iii) two oil producers acting on their own self-interest when deciding how many wells to dig, the non-cooperative outcome can lead to overproduction and environmental degradation, which also harms society as a whole. However, in the case of (i) oligopolists trying to maintain monopoly profits, while the non-cooperative outcome may harm consumers and competitors, it is not necessarily bad for society as a whole. Thus, (ii) and (iii) are the correct choices.

In Which of the Following Prisoners' Dilemma Games Is the Non-Cooperative