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The prisoner’s dilemma in game theory demonstrates why two rational actors might not cooperate, even when:

ACooperation yields a better collective outcome for both
BNeither actor has a dominant strategy
CPayoffs are completely unknown to both players
DCooperation yields a worse outcome for both

Explanation

The prisoner’s dilemma shows that individual self-interest leads both players to non-cooperative outcomes that are inferior to joint cooperation.

Submitted by: mcqstutor Team More Economics MCQs →

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