Consider an Example of the Prisoner's Dilemma Where 2 Firms

question 27

Multiple Choice

Consider an example of the prisoner's dilemma where 2 firms are making sealed bids on a contract and each firm is allowed to bid either $100 or $180.If both firms bid the same price,the job is shared equally and each firm earns half the value of its bid.Otherwise the lowest bidder wins the contract and receives the full value of its bid (and the other bidder earns zero) .The cooperative outcome in this situation is

• A)both firms bid $180.
• B)both firms bid $100.
• C)both firms bid $50.
• D)one firm bids $100,the other firm bids $180.
• E)both firms bid $90.

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Definitions:

Amphetamine

A stimulant drug used to treat attention deficit hyperactivity disorder (ADHD) and narcolepsy, known for increasing alertness and concentration.

Estrogen

A group of steroid hormones that play a crucial role in the development and regulation of female reproductive and sexual functions.

Fatty Tissue

Adipose tissue, a type of connective tissue that stores energy in the form of fat and provides insulation and protection to the body.

Stimulants

Substances that increase alertness, attention, and energy, often used to treat ADHD but also widely abused.