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T HE P RISONERS D ILEMMA Prison officials tell (separately) each of two prisoners (A & B) the following: If you betray your colleague, and she is loyal to you, you get a benefit of +12, and your colleague will get 0. If you are loyal to each other, each of you get a benefit of +10. If you are loyal to your colleague but she betrays you, then she gets a benefit of +12, and you get nothing. If each of you betrays the other, each of you gets a benefit of +2. How should the prisoners approach the problem? A betrays BA is loyal to B B betrays A B is loyal to A

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T HE P RISONERS D ILEMMA Prison officials tell (separately) each of two prisoners (A & B) the following: If you betray your colleague, and she is loyal to you, you get a benefit of +12, and your colleague will get 0. If you are loyal to each other, each of you get a benefit of +10. If you are loyal to your colleague but she betrays you, then she gets a benefit of +12, and you get nothing. If each of you betrays the other, each of you gets a benefit of +2. How should the prisoners approach the problem? A betrays BA is loyal to B B betrays AA +2, and B +2 B is loyal to A

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T HE P RISONERS D ILEMMA Prison officials tell (separately) each of two prisoners (A & B) the following: If you betray your colleague, and she is loyal to you, you get a benefit of +12, and your colleague will get 0. If you are loyal to each other, each of you get a benefit of +10. If you are loyal to your colleague but she betrays you, then she gets a benefit of +12, and you get nothing. If each of you betrays the other, each of you gets a benefit of +2. How should the prisoners approach the problem? A betrays BA is loyal to B B betrays AA +2, and B +2A 0, and B +12 B is loyal to A

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T HE P RISONERS D ILEMMA Prison officials tell (separately) each of two prisoners (A & B) the following: If you betray your colleague, and she is loyal to you, you get a benefit of +12, and your colleague will get 0. If you are loyal to each other, each of you get a benefit of +10. If you are loyal to your colleague but she betrays you, then she gets a benefit of +12, and you get nothing. If each of you betrays the other, each of you gets a benefit of +2. How should the prisoners approach the problem? A betrays BA is loyal to B B betrays AA +2, and B +2A 0, and B +12 B is loyal to AA +12, and B 0

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T HE P RISONERS D ILEMMA Prison officials tell (separately) each of two prisoners (A & B) the following: If you betray your colleague, and she is loyal to you, you get a benefit of +12, and your colleague will get 0. If you are loyal to each other, each of you get a benefit of +10. If you are loyal to your colleague but she betrays you, then she gets a benefit of +12, and you get nothing. If each of you betrays the other, each of you gets a benefit of +2. How should the prisoners approach the problem? What approach gives the best total benefit? A betrays BA is loyal to B B betrays AA +2, and B +2A 0, and B +12 B is loyal to AA +12, and B 0A +10, and B +10

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T HE P RISONERS D ILEMMA C HANGED C ONTEXT Under the Articles of Confederation, states could impose tariffs on each others products, and many of them did. This increased the effective cost of manufacturing, causing manufacturers to increase their prices without a corresponding increase in the quantity or quality of their products. If every state did this, what would happen? How should the states approach the problem? How should Congress approach the problem? What approach gives the best total benefit for the nation? A imposes a tariff on B products A imposes no tariff on B products B imposes a tariff on A products A +2, and B +2A 0, and B +12 B imposes no tariff on A products A +12, and B 0A +10, and B +10

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