Use the following Prisoners Dilemma game to answer question 24. The first number

Question

Use the following Prisoners Dilemma game to answer question 24. The first number is Sam's payoff and the second number (which follows the comma) is Susan's payoff. Susan and Sam operate the only two Bed and Breakfast locations in Olympia, Washington. They are trying to decide on how to price a one night stay in their bed and breakfast separately. Based on what you know about the Nash equilibrium outcome of the prisoners dilemma game, what is the optimal action for both parties? For the answers Sam's action is first and Susan's action is second. cooperate; cooperate; defect; defect; cooperate

Explanation / Answer

Sam's action will be to cooperate because Sam is getting higher of the case if he cooperates in both the scenarios i.e. Susan cooperate (60,20) or Susan defect (80,40). Same is with Susan she will have higher return in cooperating when Sam is cooperating hence Nash equilibeium will be A. cooperate,cooperate

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