Adam and Jon Are the Only Players Playing in a Local

question 26

Multiple Choice

Adam and Jon are the only players playing in a local golf tournament.They can either practice for 5 hours or not practice at all.Practice has both direct monetary costs and opportunity costs.Their scores for an 18-hole round of golf with and without practice are shown in the table.Total prize money is $12,000.Two possible reward structures exist.In Plan A,the low score wins $10,000,second place wins $2000,and a tie results in $6000 each.Plan B requires a player to score 71,or less,for first place,72 to 80 is considered second place.The $10,000 will be split between those with a 71 or lower score,with a guaranteed minimum of $2000.The $2000 for second will be split between those with a score between 72 and 80.
-Refer to the information above.Under the reward structure of Plan B,

• A) a positional arms race will develop.
• B) a positional externality exist.
• C) the prisoner's dilemma is eliminated.
• D) a positional arms race might develop.
• E) the quality of play,as measured by scores,is improved.

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