H3 Economics Practice Questions - Singapore GCE Exam - H3 Economics Exam

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In a standard simultaneous-move Prisoner's Dilemma matrix game between two firms deciding whether to Cooperate (maintain high price) or Defect (cut price), which statement correctly describes a strictly dominant strategy?

Defecting yields a higher payoff for a player regardless of the strategy chosen by the opponent Cooperating yields the highest joint payoff, so it is the dominant choice for rational agents A dominant strategy exists only when both players have identical payoff values in every cell Defecting is dominant only if the opponent is known to choose Cooperate

Correct Answer:

Defecting yields a higher payoff for a player regardless of the strategy chosen by the opponent

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