A Collusive Agreement Between Two Duopolists Is Similar to the Prisoners

question 120

Multiple Choice

A collusive agreement between two duopolists is similar to the prisoners' dilemma because in both games

• A) each player's strategy depends on what the other player does.
• B) the Nash equilibrium is not the best outcome for the players.
• C) the best outcome is always achieved.
• D) All of the above answers are correct.

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Definitions:

Learning

The acquisition of knowledge, skills, behaviors, or attitudes through experience, study, or teaching.

Conditioned Stimulus

A previously neutral stimulus that, after being repeatedly paired with an unconditioned stimulus, elicits a conditioned response.

Unconditioned Response

An innate, spontaneous response to a stimulus that happens without any previous instruction or training.

Conditioned Response

A learned response to a previously neutral stimulus due to conditioning.