Why Can Trade Negotiations Between Two Countries Be Viewed as a Prisoner's

question 50

Multiple Choice

Why can trade negotiations between two countries be viewed as a Prisoner's Dilemma?

• A)While mutual free trade is better than mutual protection for both countries,each country may have an incentive to unilaterally impose protection if they care more about producers than consumers.
• B)Trade negotiations often hold other elements of diplomacy "hostage" while they are ongoing.
• C)If all sides in the negotiations reveal all of the information about their industrial capabilities and production plans,specialization can more easily occur,but both sides also have an incentive to keep quiet and use their industrial secrets to exploit the other side.
• D)As long as one side implements free trade,it is always better for the other side to do so as well; so the key to getting mutual free trade is to assure the other side of your intentions.

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Definitions:

Modeling

A process in psychology where individuals learn behaviors by observing and imitating others.

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Reverse Modeling

A technique in systems biology used to create computational models that predict the behavior or structure of systems from data.