Scenario: Consider the tragedy of the commons problem. Suppose two firms (Row Inc. and Colm Inc.) are involved in a production process that exploits a natural resource. Each firm has two options: 1 and 2. The matrix below shows the game matrix for these two firms. The first number listed in each cell is the payoff to Row Inc., and the second number listed is the payoff to Colm Inc.

-Refer to the scenario above.This game ________.
A) does not have a dominant strategy equilibrium
B) does not have a Nash equilibrium
C) has multiple Nash equilibria
D) has a dominant strategy equilibrium

Question

Scenario: Consider the tragedy of the commons problem. Suppose two firms (Row Inc. and Colm Inc.) are involved in a production process that exploits a natural resource. Each firm has two options: 1 and 2. The matrix below shows the game matrix for these two firms. The first number listed in each cell is the payoff to Row Inc., and the second number listed is the payoff to Colm Inc.
 
-Refer to the scenario above.This game ________.
A) does not have a dominant strategy equilibrium 
B) does not have a Nash equilibrium 
C) has multiple Nash equilibria 
D) has a dominant strategy equilibrium

Quizplus · Accepted Answer

The game has a dominant strategy equilibrium because each player has a dominant strategy that is independent of the other player's strategy.

Scenario: Consider the Tragedy of the Commons Problem