Why can’t two firms in a Prisoners’ Dilemma enforce a better outcome t
Why can’t two firms in a Prisoners’ Dilemma enforce a better outcome that has higher payoffs?
A) Under an outcome with higher payoffs, the outcome is not a Nash equilibrium and each firm has an incentive to change their actions.
B) Barriers to entry
C) Barriers to exit
D) The Nash equilibrium in a Prisoners’ Dilemma has the highest possible payoffs for both firms.
ANSWER
A
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