A 2 × 2 matrix game in which each player has a dominant strategy determining an equilibrium that is Pareto dominated is called the
A) prisoner's dilemma game
B) second-auction game
C) centipede game

Question

Quizplus · Accepted Answer

In a prisoner's dilemma game, both players have a dominant strategy that leads to a Nash equilibrium that is Pareto dominated, meaning there exists an alternative outcome where both players are better off. This occurs when each player has an incentive to defect, even though mutual cooperation would result in a better outcome for both players. Therefore, the best choice is A) prisoner's dilemma game.

A 2 × 2 Matrix Game in Which Each Player