Which of the following happens when the prisoners' dilemma game is repeated numerous times in an oligopoly market?
(i) the firms might reach the monopoly outcome
(ii) the firms might reach the cooperative outcome
(iii) society will always be better off
A)(i) and (ii)
B)(ii) and (iii)
C)(i) and (iii)
D)(ii) only

Question

Quizplus · Accepted Answer

When the prisoners' dilemma game is repeated numerous times in an oligopoly market, the firms may learn to cooperate and achieve the cooperative outcome. However, if there is a possibility of cheating, firms may revert to their non-cooperative strategies and end up with the monopoly outcome. Therefore, both (i) and (ii) are possible outcomes, and (iii) cannot always be guaranteed.

Which of the Following Happens When the Prisoners' Dilemma Game