Suppose that Teresa and Caroline are both in the public eye. They get offers to sell secrets of the other to tabloids. If both keep the secrets, they are both better off than if they get exposed. If only one is exposed, the other person is better off than if no one was exposed. Their payoffs from each option are given in the payoffmatrix.

Suppose that Caroline and Teresa play the game over fourtelevision seasons, where each season is a new game. Consider the scenarios. Remember, a tit?for?tat strategy is one where the person starts by cooperating and then plays whatever strategy the other firm playedlast.

Over four seasons, how much will Caroline make if she and Teresa both playtit?for?tat?

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$

Over four seasons, how much does Caroline make if she always exposes and Teresa playstit?for?tat?

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$

Over four seasons, how much will Caroline make if she plays a tit?for?tat strategy and Teresa alwaysexposes?

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$

Over four seasons, how much will Caroline make if she and Teresa both alwaysexpose?

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$

Does Caroline have a dominant strategy when she and Teresa play for fourseasons?

No, there is no dominant strategy between tit?for?tat and always expose in thissituation.

Yes, tit?for?tat is a dominantstrategy.

Yes, always expose is a dominantstrategy.