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

question 28

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

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Definitions:

Permissive-Indulgent

A parenting style characterized by high responsiveness but low demandingness, often leading to children who lack self-discipline and self-control.

Mature Behavior

Actions and responses that exhibit emotional regulation, responsibility, and informed decision-making, typically associated with adults.

Preoperational Children

Refers to a stage in Piaget's theory of cognitive development where children aged 2-7 years think symbolically but are not yet able to perform operations (logical use of symbols).

Vantage Point

A place or position from which something is observed or considered, often figuratively describing one's unique perspective or standpoint on an issue.