Question

Suppose rashard and alyssa are playing a game that requires both to simultaneously choose an action: up or down. the payoff matrix that follows shows the earnings of each person as a function of both of their choices. for example, the upper-right cell shows that if rashard chooses up and alyssa chooses down, rashard will receive a payoff of 8 and alyssa will receive a payoff of 5.

alyssa
up down
rashard up 6,6 8, 5
down 3,6 9, 5
in this game the only dominant strategy is for ___ to choose_____

Answer 1

In the prisoner's dilemma faced by Mary and Raj regarding their corn production, the best choice for Raj if he is sure of Mary's cooperation is to also cooperate, but if Mary suspects Raj will cheat, she should work independently. Without trust, both are likely to end up working independently, earning less than if they ensure cooperation.

Step-by-step explanation:

The prisoner's dilemma is a classic example in game theory. If Mary and Raj are playing this game of cooperation, the optimal choice for Raj if he is sure Mary will cooperate is to also cooperate (B = Cooperate and Lower Output), both earning $150. If Mary believes Raj will cheat, she should also choose to work independently (A = Work Independently) to avoid the risk of earning $0.

This is because the dominant strategy in a prisoner's dilemma is to act in one's own self-interest, due to the fear that the other party may not cooperate. Thus, the likely outcome, when each pursues their interest without trust, is both choosing to work independently, each earning $100. The preferred choice, if they could ensure cooperation, would be both choosing to cooperate, raising their earnings to $150 each.