Final answer:
The dominant strategy in the prisoner's dilemma, as outlined in the payoff matrix, is for both suspects to testify against each other to avoid the harshest penalty and possibly gain a lighter sentence. The correct answer is option: b. both suspects testify.
Step-by-step explanation:
The dominant strategy for the two suspects in the prisoner's dilemma, according to the payoff matrix provided, is for both suspects to testify against each other. Looking at the situation from each prisoner's perspective, if one prisoner believes the other will testify (defect), their best response is to also testify to avoid receiving the harshest penalty.
Likewise, if they believe the other will keep quiet (cooperate), it remains in their best interest to testify to receive a lighter sentence. This behavior aligns with pursuing their own self-interest, which indicates that confessing (testifying) is their dominant strategy. Therefore, the answer is both suspects testify.