Question

Provide an example of a third party benefiting from a prisoner’s dilemma outcome while the game participants are worse off relative to other possible outcomes. Also, explain the nature of the benefit.

How can a repeated game help in resolving a prisoner’s dilemma outcome?

Why is game theory important to economics?

Answer 1

ANS) -- The Prisoner's dilemma is a well known game theories.This theory gives a structure for knowing how we can make a balance in in between the coordination and competition and it also helps in the decision making.And this is having application in the fields like economics,philosophy ,biology and sociology.

-- One of the example of the prisoner's dilemma is that,for example 2 friends called Thomas and Joseph has done a offence and had cross questioned in different halls.Now the Thomas and Joseph want to reduce their jail sentence,so now these two friends are going through the same situation.

-- The Prisoner's dilemma is also a very good sample of logical reasoning and decision included in the game theory.This is the condition in which 2 people are needed to make decisions individually and that will make problems individually and problems in between them.In such a situation the people challenge a dilemma regarding their conclusion,because at the time when motivated completely by own interest,but at that time they go through more problems than motivated through a team interest.

-- So what actually helps to understand how contestants are giving the response to contrasting model of play and this will disclose how that contestants will be assumed to act in the time ahead.

** The repeated game means it is one of the large form of game which contain many repetition of little level game or stage game and this game is a game in which 2 person play.Through this game a player will understand that their present action will affect their future.The repeated dilemma games ,it has been discovered that the priority strategy is not for playing a Nash strategy of the base game,anyway it for the cooperation and play a socially perfect strategy.

** Game Theory made a excellent growth in the economic theory.This has made a good solutions to many, of the issues regarded with , a condition in which 2 suppliers are dominated at the market for a commodity, a market is shared by a little number of sellers.In these fields it was very difficult to make solution because of the interest which makes clash between the individuals and company or firm.

** This theory has also made balance solutions in the rational reaction of the mart members.Nash equilibrium is one of the main topic in the game theory which means a stable condition in the game in which the player cannot change his game plan,assuming the another player also do not change the game plan.So we can say that this kind of Nash equilibrium can make a solution in the games were both the players are not cooperating.

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