Question

In which of the following games is it clearly the case that the cooperative outcome of the game is good for the two players and bad for society? A. Two airlines dominate air travel between City A and City B, and each airline decides whether to charge a "high" airfare or a "low" airfare on flights between those two cities. B. Two superpowers decide whether to build new weapons or to disarm. C. Two oil companies own adjacent oil fields over a common pool of oil, and each company decides whether to drill one well or two wells. D. In all of the above cases, the cooperative outcome of the game is good for the two players and bad for society

Answer 1

Answer:

A. Two airlines dominate air travel between City A and City B, and each airline decides whether to charge a "high" airfare or a "low" airfare on flights between those two cities.

Explanation:

Option A is correct

Out of all the options, the cooperative described in this option is the clearest of them and shows the perfect scenario on how the two huge players can come together to form a monopoly and oppress members of the society.

The arbitrary determination of prices by the two major airlines only benefits the airlines, and does not help the society in any way. We can thus say that it is bad for the society.

Option B is not correct.

The building of new weapons by the two super powers does not show a possible cooperative. The option is not also clear on how the weapons can benefit the superpowers if they "work together".

This makes option b wrong.

Option C is not correct.

This is because the option is not clear on how deciding to drill one or two wells benefits the companies themselves. Also, the impact of the drilling of the wells is quite vague and does not directly affect the society.

From all the options, Option A fits best in terms of clarity an appropriateness