Why Is the "Prisoners' Dilemma" a Good Model of Experience

question 43

Multiple Choice

Why is the "prisoners' dilemma" a good model of experience goods markets with no signaling of commitments?

• A)Because it can be likened to a win-lose game
• B)Because this is a two-person game with clearly defined options, as in the prisoners' situation
• C)Because the producer cannot communicate true quality at the time of buying and the customer cannot work out true quality until after buying, a low quality solution minimizes risks in this low-trust situation
• D)Because both are in a closed situation where they have an obligation to make a deal

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