Alan and Beatrice are students who are being investigated for colluding on an assignment. The figures show their payoffs from their individual choices to Deny or Confess, and Alan'... Alan and Beatrice are students who are being investigated for colluding on an assignment. The figures show their payoffs from their individual choices to Deny or Confess, and Alan's indifference curves are depicted. Based on this information, which of the following statements is correct?
Understand the Problem
The question is asking about a game theory scenario involving two players, Alan and Beatrice, with their respective payoffs based on different strategies they can choose. It asks which of several statements regarding their strategies is correct, based on the given information and graphs.
Answer
(C, D) is the dominant strategy when Alan is altruistic and Beatrice is selfish.
The statement 'When Alan is somewhat altruistic and Beatrice is completely selfish, then (C, D) is the dominant strategy equilibrium.' is correct.
Answer for screen readers
The statement 'When Alan is somewhat altruistic and Beatrice is completely selfish, then (C, D) is the dominant strategy equilibrium.' is correct.
More Information
In the prisoner’s dilemma scenario depicted, when Alan values Beatrice’s outcomes (altruistic) and Beatrice is only self-interested, the equilibrium shifts to maximize their combined payoffs.
Tips
A common mistake is assuming both players are either selfish or altruistic; mixed preferences change the equilibrium dynamics.
Sources
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