Question

Rice-to-Riches and Rice Pudding Palace are two shops of similar size that sell rice pudding desserts. Both shops frequently offer "Buy One, Get One Free" specials in an attempt to steal the other store's customers. But because both shops offer the same deal, they both end up losing money. This type of situation is BEST described as a _____ game.

Answer 1

Answer:

Prisoner's Dilemma

Explanation:

Developed by Merrill Flood and Melvin Dresher in Rand 1950, this is analysis in game theory that reflects

a dilemma or a paradox in decision analysis that puts two individuals acting in their own self-interests and thinking rationally in a situation where they do not produce the optimal outcome. The typical prisoner's dilemma models parties that choose not to cooperate/protect themselves and therefore at the expense of each other.