Consider an Outcome in Which It Is Impossible to Make

question 3

Multiple Choice

Consider an outcome in which it is impossible to make one player better off without simultaneously making the other player worse off.We can conclude that this outcome

• A) cannot be a Nash equilibrium.
• B) must be Pareto optimal.
• C) will not occur when the players use mixed strategies.
• D) is a Stackelberg equilibrium.

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Definitions:

Judgment

The capacity to make well-considered choices or come to reasonable conclusions.

Optimistic Bias Heuristic

A cognitive shortcut that leads individuals to believe that they are less likely to experience negative events compared to others.

Error

A mistake in reasoning, action, or calculation that may lead to incorrect conclusions or outcomes.

Judgment

The ability to make considered decisions or come to sensible conclusions based on a critical assessment of evidence and reasoning.