Consider an Example of the Prisoner's Dilemma Where 2 Firms

question 118

Multiple Choice

Consider an example of the prisoner's dilemma where 2 firms are making sealed bids on a highway-construction contract and each firm is allowed to bid either $100 million or $120 million.If both firms bid the same price,the job is shared equally and each firm earns half the value of its bid.Otherwise the lowest bidder wins the contract and receives the full value of its bid (and the other bidder earns zero) .The non-cooperative outcome in this situation is

• A)both firms bid $50 million.
• B)both firms bid $60 million.
• C)one firm bids $100 million,the other firm bids $120 million.
• D)both firms bid $100 million.
• E)both firms bid $120 million.

---

Definitions:

Ph.D. In Psychology

A doctoral degree that represents the highest level of education in the field of psychology, focusing on research, theory, and clinical practice.

University of Minnesota

A public research university located in Minneapolis and St. Paul, Minnesota, known for its high-quality education and research programs.

Behaviorism

Behaviorism is a psychological approach that emphasizes the study of observable behaviors and the processes behind learning, excluding theories of the mind.

Wundt

Wilhelm Wundt, often regarded as the father of experimental psychology, who established the first psychological laboratory in Leipzig, Germany, in 1879.