When decision makers face incentives that make it difficult to achieve mutually beneficial outcomes,we say they are in a(n)________ dilemma.
A) oligopoly
B) prisoner's
C) prison guard's
D) monopoly
E) competitive

Question

Quizplus · Accepted Answer

A prisoner's dilemma arises when individuals or companies face a situation where pursuing self-interest leads to a suboptimal outcome for all the parties involved. This can happen in situations like pricing decisions or natural resource management where cooperation leads to a better outcome than competition. In such scenarios, each party has a dominant strategy of pursuing self-interest, even though the collective outcome would be improved if they cooperated.

When Decision Makers Face Incentives That Make It Difficult to Achieve