The Prisoners' Dilemma Game

question 196

Multiple Choice

The prisoners' dilemma game

• A)is a situation in which two players both have dominant strategies which lead to the highest total payoff for the two players.
• B)has no Nash equilibrium since players, after agreeing to play their dominant strategy, will have an incentive to switch to another strategy.
• C)has a Nash equilibrium, but the Nash equilibrium outcome is not the outcome the players would agree to if they could cooperate with each other.
• D)Both a and c are correct.

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Definitions:

Federal Budget

The government's estimate of revenue and expenditures for a forthcoming fiscal year, outlining how federal funds are allocated among different programs and services.

Federal Revenues

Income received by the federal government from taxes, fees, and other sources.

Annually Balanced Budget

A fiscal strategy or policy where government revenues are planned to match expenditures within a single year, aiming to prevent budget deficits.

Tax Revenues

Tax revenues refer to the income that is collected by the government from individuals and businesses, primarily through taxes such as income tax, sales tax, and property tax.