In the case of a prisoners dilemma, the outcome when each player adopts its dominant strategy is

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In the case of a prisoner’s dilemma, the outcome when each player adopts its dominant strategy is worse than the outcome that could be achieved with cooperation. The following payoff matrix shows the hypothetical daily profit in millions of dollars for Citgo and Shell, depending on each firm’s decision about whether to advertise or not.


a. What is the dominant strategy, if any, for each firm?


b. Would this game be appropriately described as a prisoner’s dilemma? Why or why not?image

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Survey Of Economics

ISBN: 9781429259569

1st Edition

Authors: David A. Anderson

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