📚 Learning Guide
Game Theory
medium

In the context of Game Theory, the scenario where two individuals choose between cooperation and self-interest, often leading to a suboptimal outcome, is best illustrated by the _____ game.

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Nash equilibrium

B

Prisoner's Dilemma

C

Zero-sum

D

Stag Hunt

Understanding the Answer

Let's break down why this is correct

Answer

In Game Theory, the scenario where two individuals must decide between cooperating or acting in their own self-interest is best illustrated by the Prisoner's Dilemma. In this game, two criminals are arrested and given a choice: if one betrays the other while the other stays silent, the betrayer goes free while the silent one gets a long sentence. However, if both stay silent, they receive a shorter sentence, and if both betray each other, they both get moderate sentences. The dilemma arises because, although cooperation leads to the best overall outcome, each individual tends to choose self-interest to avoid the risk of being betrayed. For example, if two friends are deciding whether to work together on a project or try to take credit for it individually, their decision can lead to a worse result if they both choose to act selfishly.

Detailed Explanation

The Prisoner's Dilemma shows how two people can end up worse off if they act selfishly instead of working together. Other options are incorrect because Some might think this is about cooperation, but it actually describes a stable situation where no one wants to change their choice; This term means one person's gain is another's loss.

Key Concepts

Game Theory
Strategic interactions
Payoff Matrix
Topic

Game Theory

Difficulty

medium level question

Cognitive Level

understand

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