Question

People who booked a tour with a company in Alaska before COMID-19 can request a cash refund or a credit that they can use later meaning the company will still have the money. If too many people ask for cash refunds, the company will go out of business. Their customers, who are all around the world and do not know each other, prefer that the company stays in business while they receive a cash refund. No one wants the company to go out of business while they still have trip credit (so they would lose their money. Based on what you know about game theory, what is the most likely outcome?

A. Everyone will cooperate, take trip credit, and the company will stay in business.
B. Everyone will honor sunk costs, take the cash refund, and the company will go out of business.
C. Everyone will honor sunk costs, take trip credit, and the company will stay in business.
D. Everyone will follow their self-interest, request a cash refund, and the company will go out of business.
E. None of these.

Answer 1

A. Everyone will cooperate, take trip credit, and the company will stay in business.

Step-by-step explanation:

The people have booked the tour before COMID-19. It is an uncontrollable factor which is not in the control of anyone. The people and the company will have to bear the consequences of the COMID-19 together. If the customers ask for cash refund, it is not possible for the company to repay all its customers back because the company might have made necessary arrangements for their guests.