The difference between a coordination problem and a prisoner's dilemma is that:
A) Coordination problems have multiple equilibria while prisoner's dilemma games have one unique dominant strategy equilibrium.
B) Prisoner's dilemma games have multiple equilibria while coordination games have one unique dominant strategy equilibrium.
C) Coordination problems have multiple equilibria, one of which must be payoff dominant, while prisoner's dilemma games have multiple equilibria which need not be payoff ranked.
D) Prisoner's dilemma games have multiple equilibria, one of which must be payoff dominant, while coordination problems have multiple equilibria which need not be payoff ranked.

Question

Quizplus · Accepted Answer

Coordination problems are characterized by having multiple equilibria, where players must coordinate their choices to achieve a mutually beneficial outcome. In contrast, a prisoner's dilemma has a unique Nash equilibrium where each player has a dominant strategy, leading to a less optimal outcome for both compared to mutual cooperation.

The Difference Between a Coordination Problem and a Prisoner's Dilemma