Microeconomics
11th Edition
ISBN: 9781260507140
Author: David C. Colander
Publisher: McGraw Hill Education
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Question
Chapter 20, Problem 1QE
(a)
To determine
Definition and assumption leads to prisoner’s dilemma.
(a)
Expert Solution
Explanation of Solution
The prisoner’s dilemma is the game between two persons that illustrate why cooperative behaviour is difficult to maintain. In this case, both persons will take a strategy to maintain their interests. This is based on some assumptions that are listed as follows:
- 1) Each player act to fulfil their interest.
- 2) No communication between the prisoners’.
- 3) No binding agreements.
(b)
To determine
The possibility of escaping the prisoner’s dilemma.
(b)
Expert Solution
Explanation of Solution
A binding agreement or trusting each other are the main method to escape from the prisoner’s dilemma. If one firm is ready to take his strategy without worsening the other, this will create a possibility to escape them from the dilemma.
(c)
To determine
The opinion of standard model and experiment economy to Answer b.
(c)
Expert Solution
Explanation of Solution
According to the standard model, the firms will not trust the other one and they do only for their interest and better off. Thus, there is a possibility of cheating when the game is played by two firms. Experimental economists argue this and they say that the firms will take their decisions only after considering the effects on other firms too.
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Economics
Consider the ultimatum and dictator games.
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From your own understanding on the concept of “Game Theory”, what can you conclude about the relationship between rules of the game and the outcome that results?
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game theory.
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Nash equilibrium.
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the prisoners' dilemma.
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dominant strategy equilibrium.
Chapter 20 Solutions
Microeconomics
Ch. 20.1 - Prob. 1QCh. 20.1 - Prob. 2QCh. 20.1 - Prob. 3QCh. 20.1 - Prob. 4QCh. 20.1 - Prob. 5QCh. 20.1 - Prob. 6QCh. 20.1 - Prob. 7QCh. 20.1 - Prob. 8QCh. 20.1 - Prob. 9QCh. 20.1 - Prob. 10Q
Ch. 20.A - Netflix and Hulu each expects profit to rise by...Ch. 20.A - Prob. 2QECh. 20 - Prob. 1QECh. 20 - Prob. 2QECh. 20 - Prob. 3QECh. 20 - Prob. 4QECh. 20 - Prob. 5QECh. 20 - Prob. 6QECh. 20 - Prob. 7QECh. 20 - Prob. 8QECh. 20 - Prob. 9QECh. 20 - Prob. 10QECh. 20 - Prob. 11QECh. 20 - Prob. 12QECh. 20 - Prob. 13QECh. 20 - Prob. 14QECh. 20 - Prob. 15QECh. 20 - Prob. 16QECh. 20 - Prob. 1QAPCh. 20 - Prob. 2QAPCh. 20 - Prob. 3QAPCh. 20 - Prob. 4QAPCh. 20 - Prob. 5QAPCh. 20 - Prob. 6QAPCh. 20 - Prob. 1IPCh. 20 - Prob. 2IPCh. 20 - Prob. 3IPCh. 20 - Prob. 4IPCh. 20 - Prob. 5IPCh. 20 - Prob. 6IPCh. 20 - Prob. 7IP
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