The prisoner's dilemma:
A) explains why cartels fail.
B) describes how producers can lock themselves into a suboptimal outcome by pursuing their own self- interest.
C) shows a dominant strategy for each of the players.
D) All of the answers are correct.

Question

Quizplus · Accepted Answer

The prisoner's dilemma explains why cartels fail by illustrating how producers can lock themselves into a suboptimal outcome by pursuing their own self-interest. The game also shows a dominant strategy for each of the players, leading to a situation where rational decisions lead to an outcome that is worse for all parties involved. Therefore, all the given answers are correct.

The Prisoner's Dilemma