In the Game in Which Two Oil Companies Own Adjacent

question 21

Multiple Choice

In the game in which two oil companies own adjacent oil fields, the companies will not use the oil efficiently because

• A)neither company has a dominant strategy in the game.
• B)the companies collude and produce a quantity of oil that is less than the socially-efficient quantity.
• C)the pool from which they recover the oil is a common resource.
• D)the pool from which they recover the oil is not large enough to allow both companies to earn a positive profit.

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Definitions:

Direction

The point, objective, or targeted goal; the establishment of purpose as an essential leadership function.

Warmth

A quality of being friendly, kind, or considerate, often creating a comfortable and welcoming atmosphere.

Introspection

The examination or observation of one's own mental and emotional processes.

Interpersonal Conflicts

Disagreements or disputes between individuals resulting from differing views, goals, or values.