Question

The​ prisoners' dilemma illustrates

A. why firms have an incentive to cheat on agreements.
B. how oligopolists engage in implicit collusion under strategic situations.
C. how cooperation in strategic situations leads to the economically efficient market outcome.
D. why firms will not cooperate if they behave strategically.

Answer 1

Answer: Option (D) is correct.

Step-by-step explanation:

Prisoners' dilemma is referred to or known as an example of game theory which tends to illustrates the fact why it is at times difficult to maintain and order cooperation even when it could be mutually highly beneficial. It is described as a situation or game in between two prisoners or players who tend to act or move in self-interest, this can further result or conclude in an inefficient outcome.