Chapter 65, Problem 6MCQ

To determine

The correct option in relation to the Nash equilibrium outcome in the classic prisoners’ dilemma game.

Answer to Problem 6MCQ

From the available options, the correct option is to lead one player to change his or her strategy, but not the other.

Explanation of Solution

The opportunity to successfully cooperate will include that there would be a change in one player’s strategy that, in turn, can change the strategy of other players because they get influenced by each other. Moreover, according to Nash equilibrium, no one benefits if any person modifies their approach while everyone else sticks with their original plan. Therefore, not both players will change their strategy as it will lead one player to change their strategy. The opportunity to successfully cooperate would not result in a better payoff for only one player because cooperation needs payoffs for both players equally. It means there would be an effect on the payoffs of both players.

Therefore, the correct option is b ( lead one player to change his or her strategy, but not the other) and all other options would be incorrect.

Economics Concept Introduction

Introduction: An equilibrium where it is assumed that all players are aware of one another's equilibrium strategies and changing one's own strategy will not help anyone, is called Nash equilibrium.