In the 1980s,the USA and the USSR negotiated a reduction in nuclear arms; this is an example of a
A) non-cooperative equilibrium.
B) cooperative outcome that may not be a Nash equilibrium.
C) cooperative outcome that was a Nash equilibrium.
D) sub-game perfect equilibrium.

Question

Quizplus · Accepted Answer

A non-cooperative equilibrium refers to a situation where the players make decisions independently without any form of agreement or coordination. This is not the case in the negotiation between the USA and the USSR. A Nash equilibrium refers to a situation where no player has any incentive to change their strategy given the strategies chosen by the other players. While the reduction in nuclear arms was a cooperative outcome, it may not have been a Nash equilibrium since both parties could have had an incentive to cheat and rearm. Therefore, the reduction in nuclear arms is an example of a cooperative outcome that may not be a Nash equilibrium.

In the 1980s,the USA and the USSR Negotiated a Reduction