Consider the Prisoner's Dilemma Model Where Two Criminals Have Two

question 122

Multiple Choice

Consider the prisoner's dilemma model where two criminals have two options (confess or deny) , and each criminal must make their decision without speaking to the other criminal first. If they both confess they each get 3 years, if only one confesses then he gets 1 and his partner gets 10, and if neither confesses then they each get 0. They are in fact both guilty. In this game, the Nash equilibrium is where

• A) only one will confess.
• B) neither one confesses.
• C) both confess.
• D) It is impossible to say.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion in a set of values, indicating how spread out the values are from the average.

Revenue Management

The strategic analysis and optimization of sales growth and profitability, particularly through pricing and inventory control.

Marginal Revenue

The extra revenue generated by the sale of an additional unit of a product or service.

Spot Market

A Spot Market is a public financial market in which financial instruments or commodities are traded for immediate delivery and payment.