Anil and Bala have the choice of using either Integrated Pest Control (IPC) or Terminator (T) to solve the problem of pest insects. The following table shows their payoffs depending on their choice and the following diagram shows these possible outcomes on a graph. Based on this information, read the following statements and select the correct one.
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Question

Anil and Bala have the choice of using either Integrated Pest Control (IPC) or Terminator (T) to solve the problem of pest insects. The following table shows their payoffs depending on their choice and the following diagram shows these possible outcomes on a graph. Based on this information, read the following statements and select the correct one.

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Accepted Answer

The Nash equilibrium in this game is unique and pareto dominated by at least one other outcome.

Answer

(I, I) is the unique Pareto efficient outcome.

Answer

Anil and Bala will both be happy to move from the Pareto efficient (I, T) to the ‘fairer’ Pareto efficient outcome (I, I).

Answer

Anil and Bala can Pareto improve by moving from (T, T) to (T, I).

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Anil and Bala have the choice of using either Integrated Pest Control (IPC) or T...

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