In Which of the Following Games Is It Clearly the Case

question 456

Multiple Choice

In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and bad for society?

• A)Two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells.
• B)Two airlines dominate air travel between City A and City B, and each airline decides whether to charge a "high" airfare or a "low" airfare on flights between those two cities.
• C)Two superpowers decide whether to build new weapons or to disarm.
• D)In all of the above cases, the cooperative outcome of the game is good for the two players and bad for society

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Definitions:

Tradeoff

An exchange where one quality or aspect must be given up in order to gain another quality or aspect.

Efficiency

The optimal allocation of resources to maximize the production of goods and services or the achievement of a given objective with the least amount of waste.

Equality

Having parity in terms of opportunities, rights, and social status.

Progressive Income Tax

A tax system where the tax rate increases as the taxable amount of an individual's or entity's income increases, aiming to redistribute income more equally.