Scenario: You are playing a game of "Friend or Foe?" You and your classmate are taken to two different rooms and asked to choose whether the other is a friend or foe. You are told that if both of you choose "friend," you will get $10 each. However, if both of you choose "foe," neither of you will get anything. If one of you chooses "friend" while the other chooses "foe," the one who chooses "foe" will get $20, while the one who chooses "friend" will get nothing.
-Refer to the scenario above.In equilibrium,________.

Question

Quizplus · Accepted Answer

This scenario is a classic example of the Prisoner's Dilemma, where the rational strategy for both players, in the absence of trust or the ability to make binding agreements, is to choose "foe" to avoid the worst-case scenario of getting nothing while the other gets everything.

Scenario: You Are Playing a Game of "Friend or Foe