Collusion:
A)occurs only when no dominant strategy is present.
B)can occur when dominant strategies are present for both players.
C)is observed,but economists cannot theoretically model it.
D)is a theoretical concept that is rarely observed.

Question

Quizplus · Accepted Answer

Collusion can occur when dominant strategies are present for both players. Players may choose to collude even if it's not the optimal option for each player individually, because working together can lead to better overall outcomes. This is known as a Nash equilibrium, where each player is taking the best action given the action of the other player.