In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and good for society?
A)Two guilty criminals have been captured by the police, and each prisoner decides whether to confess or to remain silent.
B)Two airlines dominate air travel between City A and City B, and each airline decides whether to charge a "high" airfare or a "low" airfare.
C)Two duopoly firms account for all of the production in a market, and each firm decides whether to produce a "high" amount of output or a "low" amount of output.
D)Two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells.

Question

Quizplus · Accepted Answer

In the scenario with two oil companies, the cooperative outcome would be for both companies to drill one well each, ensuring a fair division of the common pool of oil and avoiding over-extraction which would harm the environment and society as a whole. This outcome benefits both companies and society. In the other scenarios, it is not clear that the cooperative outcome is good for both players and society.

In Which of the Following Games Is It Clearly the Case