(Table) Based on the game table, where Delta's payoff is listed first, does the Nash equilibrium represent a prisoner's dilemma? Why or why not?
$\begin{array}{cccc}
& && {\text { JetBlue }} \
& & \text { High } && \text { Low } \
\text { Delta } & \text { High } & 700,100 && 600,200 \
& \text { Low } & 550,70 && 500,80
\end{array}$
A) Yes, it does because there is a better outcome for both firms.
B) Yes, it does because one firm is unable to achieve the highest payoff.
C) No, it does not because both firms are earning the highest payoff possible.
D) No, it does not because there is no solution which is better for both players.

Question

(Table) Based on the game table, where Delta's payoff is listed first, does the Nash equilibrium represent a prisoner's dilemma? Why or why not?
$\begin{array}{cccc} 
& && {\text { JetBlue }} \
& & \text { High } && \text { Low } \
\text { Delta } & \text { High } & 700,100 && 600,200 \
& \text { Low } & 550,70 && 500,80
\end{array}$
A) Yes, it does because there is a better outcome for both firms.
B) Yes, it does because one firm is unable to achieve the highest payoff.
C) No, it does not because both firms are earning the highest payoff possible.
D) No, it does not because there is no solution which is better for both players.

Quizplus · Accepted Answer

The Nash equilibrium does not represent a prisoner's dilemma because in a prisoner's dilemma, both players have a dominant strategy that leads to a worse outcome for both compared to if they had chosen a different strategy. In this table, choosing "High" for both firms leads to the highest combined payoff (800), indicating no better mutual outcome exists, thus not fitting the criteria of a prisoner's dilemma.

(Table) Based on the Game Table, Where Delta's Payoff Is