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Economics
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a. Describe the prisoner's dilemma. Why does the prisoner's dilemma play a critical role in Institutional economics?

b. Is force or decentralization a more effective method to solve the prisoner's dilemma? Explain.

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Joshua Stredder
Joshua StredderLv10
29 Sep 2019

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Related questions

2. Watch this video involving the Prisoner's Dilemma: Golden Balls Prisoner's Dilemma (https://www.youtube.com/watch?v=S0qjK3TWZE8) After watching the video (just this video, not the Golden Balls game, which I am not familiar with), explain how the general Golden Balls payoff matrix works, and then to discuss whether they think that the player who leads off the negotiation has altered the other player’s rational strategies or not. Is just a version of trying to build trust in a single round game, without finally changing what makes sense for the players to do, assuming a single round game.

Use the information in the following table, which summarizes the payoffs (i.e., profit) to two firms.
                                                              Firm 2

                                           Average Quality    High Quality

   Firm 1   Average Quality          600, 600         400, 1100

                 High Quality            1100, 400         900, 900

a. What is each player's dominant strategy? Explain your reasoning.
b. Referring to the table above, is this an example of a prisoner's dilemma game? Why or why not?
c. Is there a Nash equilibrium? If so, what is it?

Based on the news article "Have We Evolved to Be Nasty or Nice?" (url below), Answer the following questions. http://online.wsj.com/article/SB10001424127887324105204578384930047065520.html 1. In the prisoner's dilemma, demonstrate that selfish behavior is inefficient. That is, show that players would both be better off if both cooperative. 2. In the problem of the commons, suppose each of two players has the choice whether to graze 10 cows or graze 5 cows on a common field. If both graze 10 cows, then each receives a payoff of 3. If both graze only 5 cows, then each receives a payoff of 8. If farmer i grazes 10 cows and j grazes 5 cows, then i receives a payoff of 11 and j receives a payoff of 1. What is the Nash equilibrium? Would the farmers be better off if both switched from the Nash equilibrium number of cows? Is this problem of the commons an example of the prisoner's dilemma? 3. Why do humans tend to cooperate with relatives and frequently encountered acquaintances? Discuss the role and the effect of reputation on cooperative behavior by selfish individuals. Discuss the biological reason for cooperative behavior with relatives.

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