A game where firms that pursue a dominant strategy that results in noncooperation where all players are worse off is a
A) cartel.
B) prisoner's dilemma.
C) sequential game.
D) tit for tat.
E) cooperative equilibrium.

Question

Quizplus · Accepted Answer

The scenario described in the question matches the situation in a prisoner's dilemma game. In this type of game, both firms have an incentive to pursue their dominant strategy of noncooperation, which results in a worse outcome for both players compared to if they had cooperated.

A Game Where Firms That Pursue a Dominant Strategy That